Why do some employers refuse to provide positive letters of reference?
By Stuart Rudner
Why do employers continue to refuse to provide positive letters of reference in cases where an individual was dismissed without cause? This is a pet peeve of mine, particularly where the dismissal was entirely unrelated to the individual and may have been the result of a downsizing or other institutional factors.
Historically, the law has always been employers do not have an obligation to provide a letter of reference or other assistance to a dismissed employee in their search for new work. Some plaintiff’s counsel have attempted to pursue allegations of bad faith in the course of dismissal where employers have refused to do so, which have been largely unsuccessful.
However, in the recent case of Maxwell v. United Rentals, one of the issues before the Ontario Superior Court of Justice was the fact the employer refused to provide a reference or other assistance to the employee, but also took the position the plaintiff had failed to make reasonable efforts to mitigate his damages by seeking new employment.
“I am not suggesting that the employer has an obligation to provide outplacement counseling to a dismissed employee or to bring job opportunities to the attention of the former employee but if an employer intends to argue the failure to mitigate on the part of the former employee, it would be well-advised to present evidence of assistance that was offered to the terminated employee during his or her job search."
The court went on to find there was no such evidence in that case, and the court was therefore not prepared to find that the defendant had met its burden to show the plaintiff had failed to mitigate his damages.
I have written about this issue before (for example, here and here). Obviously, where an individual was dismissed for cause, or where there were significant reasons for the dismissal that related specifically to the individual, then it may not be advisable to provide positive references. However, in the vast majority of cases, that will not be true.
Since it is in an employer's best interests to help the employee find new work, as that will reduce its legal obligations in many cases, it makes sense for them to do so. Of course, another reason to do so would simply to be a good corporate citizen and assist an individual whose employment it has just terminated. Whether the employer is motivated by altruistic considerations or to reduce its own liabilities, the bottom line is the same: In most cases, there is no good reason not to provide positive references for dismissed employees. And if you don’t, you may not find a court is sympathetic to your cause.