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 Dakota is among the states that have enacted a reference immunity law. Under North Dakota law, an employer is unconditionally immune from civil liability when it truthfully discloses a current or former employee's dates of employment, job description and duties, and wage history to a prospective employer, as long as the information provided is accurate (ND Stat. Sec. 34-02-18). An employer is also immune from liability for disclosures about a current or former employee's job performance that are made in good faith to a prospective employer. There is a presumption that the disclosure is made in good faith, which can only be rebutted by proving by a preponderance of the evidence that the employer:
• Knew the disclosure was false,
• Made the disclosure with reckless disregard for the truth,
• Made a disclosure that was deliberately misleading,
• Made the disclosure for a malicious purpose.