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Apr 18, 2017

Q&A: Use caution before telling the truth about former employee

Q&AHiringPrivacy & ConfidentialityTermination & Resignation 

Question: We just got a call from a business that wants to check on a former employee. They faxed a release the former employee signed waiving liability for information we share. Are we safe telling them what a bad employee she was?

Answer: Not so fast! A signed release seems like a golden ticket to share your true feelings and frustrations about a former employee, but the release may not actually provide you with legal protection. In fact, that’s exactly what an Indiana medical clinic recently found out the hard way. In their situation, the clinic settled an EEOC claim with a former doctor that included a confidentiality agreement. When the clinic received an evaluation request from a temp agency with a seemingly broad release protecting “all others involved in this background investigation and any subsequent investigations,” the clinic thought it had a green light to criticize its former employee. When the former doctor wasn’t hired by the employer who called the clinic for the reference, she sued the clinic for defamation and violation of the state’s blacklisting statute. Focusing on sentence construction and comma placement, the court noted that the release only protected the temp agency and all others working with it—not the former employer. Equally unhelpful was the clinic’s admission that the poor recommendation was “false” (Manhas v. Franciscan Hammond Clinic, LLC, Ind App, Feb. 2017).
 
Tips for Employers:

We understand how badly you may want to share the facts about terrible employees. You don’t want other employers to suffer the same experience, and, frankly, sometimes you feel that the employee deserves a poor recommendation based on their past performance. Although it’s tempting, you need to protect your business first. To avoid a potential defamation suit, confine your comments to confirmation of jobs held and dates of employment. If you receive a release authorizing you to provide more information—either from a former employee or a prospective employer—read it carefully. Make sure the document directly releases your company from liability for all information it shares. For an example of release language that will help protect you when providing a reference, see Vigilant’s Model Form, “Reference Checks.”

For additional questions about hiring, termination, or reference checks, reach out to your Vigilant employment attorney. They can help walk you through the specifics, review the language of any release documentation, and help you assess and mitigate your risks.

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