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.
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 for defamation of character.
Iowa is among the states that have enacted a reference immunity law. Under Iowa law, an employer is immune from liability for communicating work-related information about a current or former employee to a prospective employer in response to a request from or with the authorization of the current or former employee (IA Code Sec. 91B.2). However, the immunity will not apply to disclosures where the employer acted unreasonably. The employer will be deemed to have acted unreasonably if it provides work-related information:
• That violates a civil right of the current or former employee;
• To a person it knew or should have known had no legitimate and common interest in receiving the information; or
• That is not relevant to the inquiry being made, is provided with malice, or is provided with no good-faith belief that it is true.
Note: Authorities on state employment law indicate that the only parties with a ...