Reference checks are a useful way for employers to gather information about applicants that they might not discover through the application and interview process. However, despite the usefulness of checking references, many employers are legitimately concerned about lawsuits from former employees based on information provided in response to a request for a reference, and liability for the actions of employees where the company failed to conduct a thorough reference check. This creates a catch-22 for employers.
To deal with employers' reluctance to provide information about former employees, a number of states have enacted laws “immunizing” employers against employee claims over such disclosures. The immunity laws generally provide protection from claims by former employees of defamation of character.
Massachusetts has not yet enacted a reference immunity law. However, the state's courts have afforded some degree of protection to employers. For instance, disparaging comments about an employee's performance made by one company to another may be protected if the companies share a business relationship, and the statements are relevant to that relationship (Eastern Contractors, Inc. v. Earl R. Flansborough & Assoc., 1 Mass. L. Rep. 250 (Mass. Super. Ct. 1993)). In addition, the courts have generally held that employment references are mainly statements of opinion, which cannot be the basis of a defamation lawsuit (Welch v. Tellabs Operations, 14 Mass. L. Rep. 44 (Mass. Super. Ct. 2001)).
However, the 1st Circuit Court of Appeals has held that under Massachusetts law, an employer may be liable for defamation if its statements about an employee are true, but made with "actual malice" (Noonan v. Staples, Inc.,