Is it Safe to Provide a Job Reference?

This Advisor column was originally published in August 2005.

Many employers are reluctant to give job references for fear that they will be sued for defamation based upon the information provided. This is because an employer who makes false statements about current or former employees to a prospective employer is subject to potential liability under a defamation theory for the damage caused to the employee by the false statements.

While employers did not intend to provide "false" information, they simply did not want to get into a debate (and litigation) about whether the reference included any false information. Thus, many employers provide only the employee's job title, last date of employment and most recent wage rate when responding to a reference check. As a result, it is increasingly difficult for employers to obtain good reliable information regarding potential new employees. New legislation (Chapter 103, Laws of 2005, codified at RCW 4.24.730) clarifies that employers cannot be held liable for providing job references unless they provide information that is not only false, but is deliberately misleading or made with reckless disregard for the truth.

The new legislation, which became effective July 24, 2005, provides that an employer will be presumed to have provided a job reference in good faith and shall be entitled to immunity if the following is true:

1. The information is provided at the request of another employer or employment agency; and
2. The disclosed information relates to:
   • the employee's ability to perform his or her job;
   • the employee's diligence, skill, or reliability in carrying out job duties; or
   • illegal or wrongful acts committed by the employee when related to job duties. RCW 4.24.

The presumption of good faith may be rebutted by clear and convincing evidence that the information disclosed was knowingly false, deliberately misleading, or made with a reckless disregard for the truth. The statute advises that employers should keep a written record of the identity of persons or entities to whom the disclosure is made for a minimum of two years from the date of the disclosure. However, if such a record is kept, it must be included in the employee's personnel file, which the employee has the right to inspect.

The new legislation makes it clear that an employer cannot be held liable for responding truthfully to a request for a job reference; however, the question then becomes whether an employer has an obligation to inform a potential new employer about problems with the employee. The Washington Court of Appeals has held that there is no common law requirement to fully disclose all potentially negative information to a potential new employer. Thus, while an employer can be held liable for making misrepresentations or false statements, there is no liability for omitting potentially negative information when providing a reference. The one possible exception is where the information withheld would disclose that the employee is a threat to the safety of others.

The leading case on this is Richland School Dist. v. Mabton Sch. Dist., 111 Wn. App. 377 (2002). The Washington Court of Appeals addressed the question of what obligation an employer has to reveal negative information about a former employee to a prospective employer. The Mabton School District had employed a custodian who resigned in exchange for the dismissal of charges of child molestation. Mabton officials believed that the charges were false and a product of a nasty divorce battle. While the custodian had been reprimanded for making inappropriate comments, he had not physically harmed any students during his employment by Mabton. Mabton officials wrote letters of recommendation on the custodian's behalf without mentioning the molestation charges.

As part of a grievance dispute two years after hiring the custodian, Richland was alerted to the prior molestation charges. It then decided that he had been dishonest about his reasons for leaving Mabton, and terminated his employment. The custodian grieved his termination and an arbitrator ordered him reinstated with backpay. Richland chose instead to pay the custodian a six-figure settlement in exchange for his resignation. It then sued the Mabton School District, alleging that Mabton negligently misrepresented the custodian's employment record.

Following summary judgment rulings in the trial court, the Washington Court of Appeals was confronted for the first time with the issue of whether a former employer may be held liable for failing to disclose negative information about a former employee. Because the court found that the reference letters supplied by Mabton officials did not contain false information, it concluded that Mabton could only be held liable if it had an affirmative duty to disclose negative information. The court first determined that there is no "quasi-fiduciary" relationship between former and potential employers that imposes such a duty. The court then considered whether to adopt a standard used in some other states through which liability may be imposed on a former employer for failing to disclose information where the safety of others may depend on the accuracy of the information in the employee recommendation. The court concluded that adoption of this theory was not warranted in light of the facts of the case since there was no showing that the custodian actually presented a risk of harm to students.

The Richland case suggests that failing to reveal negative information (as opposed to deliberately giving false information) is not likely to result in liability, at least where the withholding is not likely to lead to physical harm of others. It does not mean that employers cannot, as a matter of policy, decide to provide truthful information about former employees. And, in fact, the employer cannot be held liable for doing so under the new legislation.