If you've had employees who left your business, you can expect prospective employers to contact you at some point for information about them. Employment references are one of an employer's most effective tools for verifying information that a job applicant provides, and for determining whether an applicant is qualified to successfully perform the job.
- State job reference requirements: Several states have laws that may require an employer to provide letters concerning past employment services to former employees upon their request.
- Defamation risk: Before you or anyone else in your business responds to an employment reference request, you must realize that certain types of statements about former employees may form the basis for lawsuits against you. Your primary risk is that the former employees may claim that your statements are false and damaging to their reputations and sue you for defamation.
- Other legal pitfalls: Unfavorable statements also may cause you to incur legal costs in defending suits for invasion of privacy, violations of state blacklisting laws, and similar claims.
- Limiting employment reference risks: Your best policy may be to determine what employment information you can safely provide and what steps you should take in actually providing that information to limit your risk of being sued.
However, the bottom line is that the decision is yours to make as to what amount of information, if any, you will provide in response to reference requests.