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 reference checking, many employers are legitimately concerned about lawsuits from former employees on the basis of 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. There is a detailed discussion of these legal issues.
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 for defamation of character.
Michigan has a reference immunity law. Under Michigan law, employers are immune from liability if they, in good faith, provide information from the employee's personnel file in response to a request from the current or former employee or the prospective new employer (MI Comp. Stat. Sec. 423.451et seq. ). An employer is presumed to be acting in good faith in making such a disclosure unless the employee can prove that the employer:
• Disclosed information the employer knew to be false or misleading,
• Disclosed information with a reckless disregard for its truth, or
• Made a disclosure prohibited by state or federal laws.
Note: Michigan's reference immunity law defines "employee" to include volunteers, as well as those who are compensated for their work.
Practical advice. Even with a reference immunity law, employers in Michigan ...