The background check is an inexpensive and straight forward way to verify factual information about the applicant such as current and previous job titles, current salary range, dates of employment and educational background. However, realistically, managers don’t view reference letter as very useful. In one older study, only 12% relied that reference letters were highly valuable 43% called them somewhat valuable and 30% viewed them as having little value or (6%) no value. Asked whether they preferred written or telephone references, 72% favored the telephone reference, because it allows a more candid assessment and provides a more personal exchange. In fact, reference letters ranked lowest seventh out of the seven as selection tools. Ranked from top in bottom the tools were interview, application form academic record, oral referral aptitude and achieving tests, psychological tests, and reference letters.
One survey found that only 11% of respondents said the information they get about a candidate’s violent or bizarre behavior is adequate Fifty four percent of the respondent said they get inadequate information in this area. Of 11 types of information sought in background checks, only there were ranked by a majority of respondents as ones for which they 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, work habits, personality traits, human relations skills, special skills or knowledge and employability fewer than half of HR managers responding to the su6rvey said they were able to obtain adequate information.
It’s no secret why background checks often produce such useless information: legal issues loom large. Employers providing recommendations generally can’t be successfully sued for defamation unless the employee can show malice – that is, ill will, culpable recklessness, or disregard of the employee’s rights. But the managers and companies providing the references understandably still don’t want the grief. And, one US Court of Appeals found that negative references may be adverse employment actions when they are retaliations for the employee having previously filed an EEOC claim.
Legal Issues Defamation: Federal laws that affect references include a Privacy Act of 1974 (which applies only to federal workers), the Fair Credit Reporting Act of 1970, the Family education Rights and Privacy Act of 1974 (and Buckley Amendment of 1974) and the Freedom of Information Act of 1966. These laws give individuals and students (the Buckley Amendments) the right to know the nature and substance of information in their credit files and files with government agencies and to review records pertaining to them from any private business that contracts with a federal agency. It is therefore quite possible that the person you’re describing may be shown your comments.
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. The rejected applicant has various legal remedies, including suing the source of the reference for defamation. In one case, a court awarded a man $ 56,000 after he was turned down for a job because among other things the former employer called him a character. In another an employer fired four employees for gross insubordination after they disobeyed a supervisor’s request to review their allegedly fabricated expenses account reports. The jury found that the expenses reports were honest. The employees then argued that although their employer didn’t publicize the expense account matter to others, the employer should have known that the employees would have to admit the reason for their firing when explaining themselves to future employer. The court agreed and upheld jury awards to these totaling more than a million dollars. In another case, manager who claimed he was wrongly accused of stealing from his former employer won $1.25 million in a slander suit.
As if that’s not enough there are companies that, for a small fee, will call former employers on behalf of employees who believe they’re getting bad references from the former employers. One supervisor left his job at a California telecommunications company, and though his previous employer might bad mouth him. He hired Bad References.com to investigate. BadReferences.com (which used trained court reporters for its investigations) found that supervisor at the company suggested that the employee was a little 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.