I am feeling a little guilty tonight. I just dumped a pain in the butt troublesome employee on another company. Without warning. Specifically, we fired him a couple of weeks ago, for a variety of issues, but mentioned no negative information in his reference check from his new employer. Here's why.
It has become dangerous to give out negative references. Ex-employees have become increasingly succesful at suing employers for bad references. I don't have to tell any small business owners that lazy, incompetent, unreliable, whining, trouble-making employees never believe that they are lazy, incompetent, unreliable, whining, or trouble-making. You give them a negative reference, and before you know it they are in front of a jury saying "I never did any of those things, that employer was just biased against me, that's why he fired me and then tried to get revenge on me by lying to all these other companies and blackballing me from getting a job to feed my family". Now, you are stuck trying to prove in a court of law that the reasons for termination, and what you said in the reference check, are valid. It's always good to document these situations well, but no business documents this stuff well enough to survive a plaintiff's attorney's cross examination.
As a result, our company policy is to not allow any employee to give out any references whatsoever. They are not allowed to give out any information about employees except the dates of their employment. They are most definitely not allowed to discuss reason for termination. In a few cases, I will make an exception for good employees, but even in that case I require their permision in writing.
So, sorry employers out there. I feel bad about it, but I have to protect myself because the sharks are always circling. While its inconvinient to hire a bad employee in our business, it can be a disaster in places like hospitals that have life and death situations. Crazy? Check this out.
Dear Congress: If you would like to do something useful for a change, please consider granting employers some sort of liability shield for the information they give out in references.