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. A 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.
Indiana has a reference immunity law. Under Indiana law, employers are immune from liability for disclosing information about a current or former employee, unless it is proven by a preponderance of the evidence that the information disclosed was known to be false at the time the disclosure was made (IN Code Sec. 22-5-3-1).
Within 30 days of receiving a written request from a prospective employee, a prospective employer must provide copies of any written communication with the prospective employee's current or former employers if those communications might be relied on in the hiring decision. Therefore, employers should keep in mind that any written references will not be confidential.
Practical advice. Even with a reference immunity law, employers in Indiana should consider taking precautionary measures when giving references, including:
• Insisting on a written authorization from the employee/former employee who will be the subject of the reference or from the prospective new employer. The written authorization should ...