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 on the basis of 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.
Tennessee is among the states that have reference immunity laws. Under Tennessee law, employers that provide truthful, fair, and unbiased information about job performance in response to a request from a current or former employee or a prospective new employer are presumed to be acting in good faith (TN Stat. Sec. 50-1-105). This presumption of good faith may only be rebutted by proving that the employer disclosed information:
• That was deliberately misleading
• With a malicious purpose
• With reckless disregard for whether it was false or defamatory in nature
• In violation of state or federal civil rights laws
Note: The Tennessee Supreme Court has held that an employer cannot be held liable when a former employee is compelled to "self-publish" allegedly defamatory statements by the employer to a new employer, so long as the statements are otherwise protected by the immunity statute ...