Common law (and in particular the tort of defamation) applies to any information you supply. Communication is defamatory if it is false and tends to harm the reputation of another by lowering the person in the estimation of the community or by deterring other persons from associating or dealing with him or her. There are companies that, for small fee, will call former employers on behalf of employees who believe they’re getting bad reference from the former employers. One supervisor, describing a former city employees, reportedly ‘used swear words’, said he was incompetent and said he almost brought the city down on its knees.
Another employee left his job as a supervisor of a California telecommunications company, and thought his previous employer might bad mouth him. He hired Bad References.com to investigate. Bad References.com (which uses trained court reporters for its investigations) found that a supervisor at the company suggested that the employee was ‘a little too obsessive’ and not comfortable with taking risks, or making big decisions. The former employee sued his previous employer, demanding an end to defamation and $45,000 in compensation.
In fact, defamation is an increasing concern. In one case, an employer fired four employees for ‘gross in subordination’ after they disobeyed a supervisor’s request to review allegedly fabricated expense account reports. The Jury found that the expense reports were actually honest. The employees then argued that although their employer didn’t publicize the expenses account matter to others, the employer should have known that the employees would have to admit the reason for tier firing when explaining and defamation themselves to future employers. The court agreed and upheld jury awards to these employees totaling more future employers. The court agreed and upheld jury awards to these employees totaling more than a million dollars. In another case, a manager who claimed he was wrongly accused of stealing from his former won $1.25 million in a slander suit.
Companies fielding requests for references need policies regarding this. They should ensure that only authorized managers provide information. Other suggested guidelines for defensible references include “Don’t volunteer information, Avoid vague statements and Do not answer trap questions such as, Would you rehire this person?” In practice, many firms have a policy of not providing any information about former employees except for their dates of employment, last salary, and position titles.
Perhaps this explains why in one survey only 11% of respondents said the information they get about a candidate’s violent or bizarre behavior is adequate. Fifty four percent of the respondents said that they get inadequate information in this area. Of 11 types of information sought in background checks, only three were ranked by a majority of respondents as ones for which the received adequate information: dates of employment (96%) eligibility for rehire (65%), and job qualifications (56%). With regard to salary history, reasons for leaving a previous job, work habits, personality traits, human relations skills special skills or knowledge, and employability, fewer than half of HR managers responding to the survey said they were able to obtain adequate information.
Not disclosing relevant information can be dangerous too. In one Florida case, an employee was fired for allegedly bringing a handgun to work. After his subsequent employer fired him (for absenteeism), he returned to the second company and shot a supervisor as well as the HR director and three other people taking his own life. The injured parties and the relatives of the murdered employees sued the original employer, who had provided the employee with a clean letter of recommendation. The letter stated is departure was not related to job performance, allegedly because that first employer didn’t want the employee over his firing.
The above law is applicable mostly in US and may be few other advanced countries. In India the Union leaders are required to be taken into confidence for abnormal behavior of workmen before taking drastic action against them. For staff and executives management has more freedom in suspending and sacking these category employees.