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. Additional information on these legal issues is available.
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.
Ohio is among the states that have enacted a reference immunity law. Under Ohio law, an employer may be immune from liability for communicating information about job performance when requested by an employee, former employee, or the prospective employer of an employee. The immunity is effective as long as the employer is not acting in bad faith by deliberately giving false or misleading information with the intent to mislead, or acting maliciously (OH Rev. Code Sec. 4113.71). Employers also do not have immunity if disclosure of information is an illegal discriminatory practice under the state's Fair Employment Practices Act.
Note: If a settlement agreement restricts an employer in providing references, the employer must abide by the agreement. Otherwise, the employer risks liability for breach of contract, and the immunity law will ...