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.
Utah is among the states that have reference immunity laws. Under Utah law, employers are immune from liability if they in good faith provide information about job performance, professional conduct, or evaluation of a current or former employee in response to a request from the current or former employee or a prospective new employer. There is a presumption that the employer acted in good faith, which can be rebutted only if the employee can prove by clear and convincing evidence that the employer disclosed the information with actual malice or with the intent to mislead. For purposes of this law, "actual malice" means knowledge that the information was false or a reckless disregard for whether the information was false (UT Code Sec. 34-42-1).
Practical advice. Even with a reference immunity law, employers in Utah should consider taking precautionary measures when giving references, including:
• Insisting on a written authorization from the employee/former employee who will be the subject of the reference or from the prospective new employer. The written authorization should be kept on file along with a copy of the reference or a written summary of the reference, if given orally.