North Carolina References laws & HR compliance analysis

North Carolina References: What you need to know

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. This creates a quandary for employers.
Employers are also concerned about liability for the actions of employees where the company failed to conduct a thorough reference check. North Carolina, like many states, has recognized the tort of negligent hiring (Walters v. Lumber Co., 163 N.C. 536, 80 S.E. 49 (1913)). 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.
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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 (N.C. Gen. Stat. § 1-539.12). The immunity applies unless it is shown by a preponderance of the evidence ...

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