Employment References and Defamation

Your risk in providing employment references to prospective employers is that former employees may sue you if your references are unfavorable and lead to job rejections. The claim that former employees are most likely to assert is that the references are false and damaging to their reputations and, therefore, defamatory.

An employer may be liable to a former employee for defamation if the employer communicates to a prospective employer or other person a false statement that results in damage to the former employee's reputation. Defamation is commonly referred to as "slander" if the communication is verbal and as "libel" if the communication is written.

Awards in successful defamation suits may include damages for lost earnings, mental anguish, or pain and suffering and, if the employer's conduct was sufficiently egregious, punitive damages.

A successful defamation claim requires more than merely showing that an employer provided an unfavorable employment reference. Because employment references play an important role in hiring decisions, the law usually protects an employer who in good faith discloses information that the employer believes is true to a prospective employer or other person who has a legitimate interest in receiving the information. This protection may be lost, however, if the information is not limited in scope to the inquiry being made, is disclosed at an improper time, or is disclosed in an improper manner. For further details, see guarding against defamatory statements.

The following are examples of the types of statements that you should avoid making in giving employment references: