Reference checks are a useful way for employers to gather information about applicants that might not be discovered 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 dilemma 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. New Hampshire is not among the states that have enacted reference immunity laws. However, New Hampshire's state courts have consistently refused to hold employers liable for statements made in good faith that are directly related to job performance.
Practical advice. Employers in New Hampshire should consider taking precautionary measures when giving references, including:
• Insisting on a written authorization and release from the employee/former employee who will be the subject of the reference or from the prospective new employer. The written authorization should be kept on file along with a copy of the reference or a written summary of the reference if given orally.
• Confining remarks to an objective evaluation of job performance.
Employers may also want to consider using service letters in lieu of providing references ...