Employers generally use reference checks to verify or gather information about job applicants. Despite the usefulness of reference checks, employers that are asked to provide references may be legitimately concerned about defamation lawsuits by former employees if negative information is provided in response to a reference request.
Employers are also concerned about liability for the actions of employees where the company failed to conduct a thorough reference check. Colorado, like several other states, has recognized the tort of negligent hiring (Raleigh v. Performance Plumbing and Heating, Inc., 130 P.3d 1011 (CO 2006)). Employers may be liable for intentional or negligent acts of an employee if they knew or should have known of an employee's dangerous propensities. Therefore, employers should be diligent in conducting reference and background checks on new employees, particularly when the job involves contact with the public. A detailed discussion of these legal issues is available.
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.
Colorado is among the states that have enacted reference immunity laws. Employers are immune from civil liability for the consequences of providing, at the request of any prospective employer, or current or former employee, information about the current or former employee's job history and/or job performance (CO Rev. Stat. Sec. 8-2-114). An employer is immune to lawsuits for providing such information unless it ...