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Giving Job References

By Kari Santos | Apr. 2, 2010

Expert Advice

Apr. 2, 2010

Giving Job References

Name, rank, serial number. That's about all the information many employers provide when asked for references about former employees. Confusion over legal liability has resulted in a widespread misconception that it is taboo to communicate anything beyond the person's name, last position held, and dates of employment. Yet no California case or statute prohibits truthful job references.

California Civil Code section 47(c) provides a conditional "common interest" privilege for otherwise defamatory statements made without malice concerning subjects of mutual concern. Thanks to a 1994 amendment, this privilege expressly protects employers, insulating in sum and substance "communication concerning the job performance or qualifications of an applicant for employment, based upon credible evidence, made without malice. ...."

In one case, the plaintiff alleged that his former employer had erroneously told a prospective employer that he was terminated because of "loss prevention issues" and that he was ineligible for rehire. A manager working for the employer had confused the plaintiff with another employee and, as a result, gave out incorrect information (Noel v. River Hills Wilsons, Inc., 113 Cal. App. 4th 1363 (2003)).

The court, relying on section 47(c), found there was no evidence the employer had acted with malice. As the court explained, malice requires proof of hatred or ill will toward the plaintiff, or a showing that the employer lacked reasonable grounds for believing the reference was truthful. The court also rejected the employee's argument that the reference was not based on "credible evidence," holding that the phrase simply means an employer must not provide a reference based solely on "mere rumors or unfounded gossip." (113 Cal. App. 4th at 1375.)

The Labor Code does provide former employees with an avenue of recovery against an employer for an untruthful reference. An employer violates California Labor Code section 1050 when it "by any misrepresentation prevents or attempts to prevent the former employee from obtaining employment." The offense is a misdemeanor and can result in treble damages. But under section 1053 employers are expressly permitted to furnish, upon request, a "truthful statement concerning the reason for the discharge of an employee or why an employee voluntarily left the service of the employer."

Even when an employer gives a positive reference, third-party liability can attach if important negative information is omitted. In one case, a student who was sexually molested by an administrator sued the administrator's former employers, who had provided positive references without disclosing prior complaints of sexual misconduct (Randi W. v. Muroc Jt. Unified School Dist., 14 Cal. 4th 1066 (1997)). The California Supreme Court held that an employer has a duty to third parties to avoid misrepresenting the qualifications and character of a former employee. The former employer's positive assertions regarding the administrator were deceptively incomplete because the defendants knowingly concealed facts regarding his sexual misconduct with students.

Employers must weigh these risks when considering how to handle references for their departed employees. Litigation over the truthfulness of a job reference, or the motivation of the individual who provided it, can be time-consuming and expensive. Some employers may well conclude that the risk of litigation outweighs the benefit of providing substantive references. However, if everyone took that approach, no employer would get meaningful background information about prospective employees. Such a restrictive approach appears to be overkill, given the protection afforded by Civil Code section 47(c).

Regardless of the approach chosen, every employer should have a written policy on employment references. All references should come from a central source - such as a human resources director - who is familiar with both company policy and legal risks. (If a law firm doesn't have such a person, the managing partner might be the appropriate source to tap.) Employers should strictly and consistently enforce their policies; retaliation and discrimination claims might arise if substantive references are provided for some employees and not others. As is often the case with personnel matters, fairness and honesty will go a long way.

Stephanie A. Collins is senior counsel at Sanchez & Amador in Los Angeles, where she specializes in employment litigation and counseling.

Kari Santos

Daily Journal Staff Writer

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