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.
North Carolina is among the states that have enacted a reference immunity law. Under North Carolina law, an employer is immune from liability for communicating information about the job history or job performance of a current or former employee in response to a request from the current or former employee or a prospective employer (NC Gen. Stat. Sec. 1-539.12). The immunity applies unless it is shown by a preponderance of the evidence that the information disclosed was false and that the employer knew or reasonably should have known that it was false.
For purposes of the reference immunity law, “job performance” information means:
• Suitability for reemployment
• Skills, abilities, and traits that may relate to suitability for future employment
• In the case of a former employee, the reason for separation from employment.
Under this law, the term "employer" also includes job placement services. However, the law ...