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 Dakota, like many states, has recognized the tort of negligent hiring (Schlenk v. Northwestern Bell Telephone Co., Inc., 329 N.W.2d 605 (1983)). 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.
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 (N.D. Cent. Code § 34-02-18). An employer is also immune from ...