Understanding Employment Law and References
The issue of employment law and references is quite a complex one. Many employers dread being asked to provide references for pat employees because they are worried about getting sued if the employee feels that they have been 'defamed' by the reference.
As a General Rule Employment Law and References Are Very Straight Forward and Do Not Present a Problem for Employers
In general employment law and references should be an accessible topic. There is little reason for the law to have any input into the kind of reference that an employer gives - as long as that is an honest assessment of the employee's performance. However, if an employer misrepresents the former employee, this is a serious issue, and that is where things like defamation laws come into play.
Defamation and Employment Law
A job seeker depends on a reference from their former employer to get a job. A bad reference is not illegal - as long as the reference is truthful. However, if someone is turned down for a job and then finds out that the would-be employer sought references, and one of the references was bad, then they may want to try to sue.
Factually correct statements are protected by law. Opinions are usually protected by law as well - because disagreeing with an opinion is not the same as defamation. In most states, the only thing that is illegal is misrepresenting facts in a way that would prevent someone from getting a job, or could be seen as an attempt to prevent someone from getting a job.
Many employers do not want to take chances with this, however, so if someone does seek a reference, then they will provide only the bare minimum of required information - for example "Yes, this person worked here between this start date and this end date."
This is simply a matter of company policy, and there is no law stating that this is the way that references should be provided. This policy means that people with good records may miss out on good references - and may even fail to get positions because other employers assume that such a bland reference was given because the employer had nothing positive to say. It could also mean that someone with a bad reference - who as dismissed - would be able to use such a reference
without fear of it revealing something that they don't want known.
Employers must tread carefully. Even releasing an employee is a minefield these days. It is not always possible to simply 'let someone go' without following a lengthy procedure to dismiss someone. If you make someone redundant, there are requirements regarding how long you must wait to re-fill a similar position (closing a loophole of redundancy to get rid of employees that might otherwise be about to qualify for a pay raise, more holiday time, etc).
These laws vary from state to state, so it is important that you talk to an employment law expert to make sure that you are following the correct regulations for the area in which your business is operating.