Are there dangers to giving a negative reference?
Question: If a prospective employer of a former employee calls for a reference and we have nothing good to say about the former employee, what is the advisable response? Is it safe to be honest and say unflattering things that could hurt the former employee’s chance at a new job?
Answer: Honesty is often said to be the best policy. However, providing an honest but unflattering reference can negatively impact the former employee’s chances of finding a new job (and potentially increase your liability to the employee). Further, an honest and unflattering reference could result in risk of lawsuit by the former employee. Failing to tell the truth, on the other hand, can get you into trouble with the prospective employer.
With prospective employers, you have to be concerned about their reliance placed on your reference. Providing a reference that offers “just the basics” (position, length of employment, and salary) is a good option. A skilled reference-checking employer will normally be able to ascertain whether you would rehire the employee, so your non-answers to certain key questions may say a lot without any risk of liability.
However, if you provide substantive references, a prospective employer may rely on your characterization of the employee. If it turns out a “glowing reference” does not accurately reflect the employee’s abilities (or fails to highlight a serious issue with the employee), the prospective employer might make a claim against you for misrepresentation. There is not much Canadian jurisprudence on this type of claim, but the Supreme Court of California in 1997 (Randi W. v Muroc Joint Unified School District) decided that a former employer was liable for misrepresentation when it provided excellent references for an employee who had been accused of sexually touching a 13-year-old student.
Even if your actions do not lead to trouble with prospective employers, there can yet be difficulties with the former employee. In a recent decision from Ontario’s Human Rights Tribunal (Tanimowo-Reyes v. TD Insurance), the complainant alleged the employer’s failure to provide a letter of reference was a form of reprisal because she had exercised her rights under the Human Rights Code. The tribunal disagreed, finding the employer’s practice was to provide only a letter confirming employment (without any substantive comment) and, therefore, she was being treated no differently than any other former employee.
That decision speaks to the benefit of consistency in reference-providing practices. If it is your policy to provide perfunctory letters, do so with every employee. If you are going to offer more robust references, ensure every employee’s reference contains substantive elements.
A risk in providing the unflattering reference is that a former employee may sue you for defamation. Again, there is little case law addressing this issue, possibly because reference letters are subject to “qualified privilege.” That is, absent some sort of malice on the part of the employer, reference letters cannot be relied on to support a defamation action. This kind of protection means employers may not have too much to fear in terms of a defamation suit stemming from negative reference letters.
Of course, most employers are not rushing to say unflattering things about former employees. Employers might be limited in what they may say because they are subject to a settlement agreement or because it would be contrary to their practice or policy to provide anything other than very basic information.
Ultimately, the law does not require that an employer provide a reference. But if you do provide one, be honest, be consistent and be careful.
For more information see:
• Randi W. v Muroc Joint Unified School District (1997), 14 Cal. 4th 1066 (California S.C.).
• Tanimowo-Reyes v TD Insurance, 2012 HRTO 1427 (Can. Human Rights Trib.).
