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 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. There is additional information and 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.
Wisconsin is among the states that have enacted reference immunity laws (WI Gen. Stat. Sec. 895.487et seq.). Under Wisconsin law, an employer who, on the request of an employee, former employee, or a prospective employer of the employee, provides a reference to that prospective employer is presumed to be acting in good faith. In order to establish that an employer was not acting in good faith, an employee or former employee would have to show by clear and convincing evidence that the employer:
• Knowingly provided false information in the reference;
• Made the reference maliciously; or
• Violated Wisconsin's Fair Employment Act when providing the reference.
The statute requires an employee to show only that the employer acted with "express malice," meaning ill will, envy, spite, revenge, or other bad motive ...