Candidate refused job because of bad reference sues – and loses
In May 2014, things were looking promising for Adam Papp. He had applied for the position of socio-economic statistician at the Government of Yukon and, after being screened, completing a written test and going through a phone interview, was the first-ranked candidate for the job.
But when the government did a reference check with his former employer, he was not offered the position.
Papp went on to claim damages for defamation in the amount of $500,000; punitive, exemplary and aggravated damages in the amount of $200,000; damages on the basis of intentional infliction of mental suffering in the amount of $30,000; and damages for wrongful dismissal of $65,000.
But the Ontario Superior Court of Justice disagreed — aside from awarding about $17,000 for his wrongful dismissal.
This decision should be a relief to employees and employers alike, said Gurlal Kler, a partner at Samfiru Tumarkin in Toronto.
“I’m sure there are certain employers that really do want to provide a reference but are afraid to, so now they can refer to this decision, which will set out their obligations,” he said. “The decision confirms that when an employee makes a request to his employer to act as a reference, when there’s absent any agreement to the contrary, the employee is agreeing that the employer is at liberty to discuss both the positive and negative aspects of the employee during the reference check.”
The decision also “saves” the whole concept of a reference check, said Kler, who represented the defence.
“If we were to put an obligation on the employer to only limit their comments to positive aspects of the employee, it renders the entire exercise moot.”
It’s definitely good news for employers, said Amy Sherrard, a labour and employment lawyer at Hicks Morley in Toronto.
“A lot of employers have concerns about providing substantive references and references checks out of fear of the potential consequences, and I think that this decision is fairly clear that, in the right circumstances, even where a substantially negative reference is provided, as long as you’re providing candid and truthful reference checks, you’re going to be protected from liability from defamation.”
After this decision, employers may be more willing to provide more detail than the standard start-and-end date, said Trevor Thomas, barrister and solicitor at Kent Employment Law in Vancouver.
“(But) at the end of the day, this is still a court decision — people still ended up in court — and how many employers want to go through that process? So I think there’s going to be employers who look at this and say, ‘OK, let’s give an honest opinion,’ but others are going to say, ‘I don’t want to be pulled into any litigation… so I’m not going to do this.’”
Background
Papp was hired by Ernest Stokes, president and secretary/treasurer of Stokes Economic Consulting in Milton, Ont., in 2011 as a staff economist. In December 2013, he was terminated from his employment by Aaron Stokes, Ernest Stokes’ son.
Papp emailed Ernest Stokes, who was in Florida, asking if he could put him down as a reference, along with listing the type of work he’d done, and Stokes replied that was OK.
In May 2014, Papp applied for the Yukon position. After the interviews, he was advised by Amanda Ho that he was the first-ranked candidate, but she still had to check his references before making an offer.
Ho managed to reach Ernest Stokes in July 2014 and asked him a series of questions from a form. When she asked about Papp’s quality of work, she noted Stokes said, “We were not that pleased.” When Ho asked about how Papp got along in a team setting, he was said to have replied, “Not well. He has a chip.” And when asked how Papp got along with his co-workers, Ho noted he said, “Not greatly.” Stokes also apparently said he “did not see any evidence” of Papp developing good working relationships, and when asked if he would rehire Papp, Stokes said, “No way.”
That same day, Ho told Papp he would not be offered the position, and later said it was because of Stokes’ reference.
At trial, Stokes said he became aware of issues between Papp and his co-workers and superiors after talking to several employees. They spoke of Papp lacking respect for authority, demonstrating a poor work ethic and making inappropriate comments. But Stokes still felt he could give a good reference about the former employee’s technical abilities.
Defamation defence
In reviewing the reference notes, the judge said there was no question Stokes’ comments were defamatory, in that: they would tend to lower Papp’s reputation in the eyes of a reasonable person; the words did refer to Papp; and the words were “published,” in that they were communicated to at least one person other than Papp.
But Stokes raised the defence of justification, meaning the statements he made were substantially true. The judge agreed.
Stokes also raised the defence of qualified privilege, as the words published in the context of a reference check fall within the range of qualified privilege. This privilege can be defeated by proof of malice, but the judge “was not satisfied on a balance of probabilities that Ernest Stokes acted maliciously.”
As a result, Stokes had a complete defence to defamation and there was no basis for punitive, exemplary or aggravated damages, or damages on the basis of intentional infliction of mental suffering, said the judge.
There are two primary defences to defamation, said Kler, one being the truth, which is justification, and the second being qualified privilege, which basically allows for free speech in certain relationships, and reference checks are one of them.
“The key difference between qualified privilege and the truth is that in a situation of qualified privilege, if statements are later found to be untrue, there still isn’t an action for defamation provided the statements were not made maliciously.”
If defamation was found here, it would render the entire practice of reference checks moot, he said.
“Why would anyone take the risk of providing a reference check?” said Kler.
“If something like that can be considered defamatory, and a company can be liable for it, no company would ever risk it, it’s not worth it. So at least this now provides at least some clarity on the employer’s obligation and hopefully encourages employers to provide references.”
The court’s decision was helped by all the verification Stokes did, as seen later with the witnesses, said Sherrard.
“The court looked at whether there was any malice in the reference Mr. Stokes had given, and because he had taken steps to back it up, he genuinely believed it to be true, and he had tried, to the best of his ability, to mention some positive traits. The court looked at all of that, and said, ‘That’s really not malice.’”
In relying on the defences of justification and qualified privilege, Stokes had all his ducks in a row by speaking with other employees and having the information to substantiate his comments, said Thomas.
“The court acknowledged that and said he didn’t come up with this out of thin air, he actually had legitimate reasons for making the comments,” he said.
“The judge found that Mr. Stokes had a legitimate basis or legitimate reason to say these things to Ms. Ho, so it wasn’t made out of malice, it wasn’t made out of spite, the statements were made because that’s how colleagues felt about him, these are things they saw, they felt, they experienced.”
The judge noted that Stokes was not reckless and did not accept at face value what had been told by Aaron Stokes, said Thomas.
“He took steps to verify what he had been told by speaking independently with some of the other employees at the office.”
The case serves as a good reminder for employers, he said.
“Yes, you can make comments that are considered defamatory, but you have to be absolutely sure that you back these up with evidence.”
Best practices
After speaking with colleagues about a former employee, like Stokes did, it might be best practice to also have them write down or confirm their comments in writing, said Thomas.
It’s also helpful to have as much detail as possible — as seen with Ho’s notes, which left some gaps in evidence — which could mean recording the telephone conversations, he said.
“On the other side, we have to be practical too, doing reference checks, taking notes, going through tons of these a day… you have to balance it out.”
There’s no downside to taking detailed notes, said Sherrard.
“For recruiters, certainly, (they should) try to take accurate notes because they’re making a decision based on that reference and they should reflect the reality of the conversation.”
It’s also a good idea for the person being interviewed to take notes, she said.
“A best practice for employers, when you’re providing a reference about employees, (is to) have your notes in front of you. And it’s always good to have records and keep your files.”
But with the Papp decision, employers should not feel they can say whatever they want carte blanche, said Sherrard.
“It’s important to make sure that your reference checks are truthful and you need to take steps to verify information if it’s not firsthand knowledge; make sure that your references are objective, and that there’s a clear reason, and if you have evidence or support to justify a negative reference, that’s always helpful,” she said.
“The more steps you take to verify the information, you’re kind of securing yourself.”
