Waking up from nightmare of reference checks
A quick guide to recommendations
Anyone who has tried to hire someone in recent years has noted a change: Past employers were once willing to give you information on your potential new hire, but now they are shut up like an oyster protecting its pearl. More often than not, the only information you can get is confirmation of employment, date of hire and termination, and if you are lucky, starting and ending salary.
"It’s name, rank, and serial number," says attorney John Gilliland, JD, who runs a practice that specializes in health care near Cincinnati in Crestview Hills, KY. "Many employers have evolved to that because they are worried about being sued. It’s a big deal in health care because of the ramifications of hiring people who may be providing care to others.
Thomas Bender, JD, an attorney with Buchanan Ingersoll in Philadelphia, agrees. His firm has written a white paper on the topic. While it isn’t at epidemic levels, there have been more and more cases where potential employees have sued former employers for hindering their job search by giving negative references, the paper states. Even more frightening, some employers are suing past employers of new hires for giving "negligent" referrals, for not revealing adverse information.
The result: confusion. "The threat of litigation, while probably exaggerated," states the white paper, "has silenced employers."
What can you do to ensure that the you get the information you need about new hires and give information that others need about former employees? Here are nine tips:
1. Know what to ask. Perhaps the best thing you can do in a situation where you are being stonewalled is to ask a simple question that few people have trouble answering, Gilliland advises. "Ask them if they would rehire the person if given the chance," he says. If the answer is yes, you know you have a good candidate. If the answer is no, you can dismiss that person. And you shouldn’t be afraid of answering such a simple question, either, he adds.
2. Enlist the help of the candidate. Gilliland says you can tell the candidate that you are having trouble getting a reference and ask them to intercede with the old employer. Some past employers are more willing to talk if the person gives them permission. He says that you can even ask your legal counsel to draft a statement which the candidate can sign, authorizing release of information and promising not to sue the former employer for any reason.
"Tell the candidate that you will have to dismiss him or her if you can’t get any information about past performance," says Gilliland.
Bender says you can even start by asking all prospective employees to sign a release that will allow you to give references about them when their employment with you ends. Wording for such a release might be as follows:
"I hereby authorize XYZ to provide information regarding my employment with XYZ to any future potential employer who requests such information as part of a background check. I release XYZ and any person acting on behalf of XYZ from all claims arising from the release of such information."
Coupled with a release obtained prior to the reference check, you have a good defense against a potential claim.
3. Be consistent in your policies. On the giving side of reference checks, you should also make sure you follow certain rules. Foremost, says Gilliland, is to be consistent. Everyone who may be asked for a reference check should know your policy and follow it. For instance, if you only give employment confirmation, then make sure that neither you or any of your staff give off-the-record remarks to someone seeking further information. "You can’t let your friendship with Mary at Dr. Jones’ office lead you to say more about the old employee than you would for someone you don’t know," warns Gilliland.
Bender says that having one person or department in charge of references is a good way to maintain your consistency. In large organizations, it would be the human resources department. But in smaller workplaces, limiting the duties to one person is a good idea.
4. Get requests in writing. The Buchanan Ingersoll white paper suggests that getting reference requests in writing is a good way to document the process and can also help maintain consistency and ensure compliance with your own policy. Ask that those requests be accompanied by a release from the former employee authorizing release of the information. Such a release should state that the company, its employees, and agents are released from all claims which can result from the reference. Your attorney can help you draft such a form.
If you do decide to do a phone reference, the paper advises that you call the requesting party back, since attorneys and investigators often pose as potential employers to get information. "Do not answer any questions until you call the requesting party back and verify the caller’s identity," the paper states.
Also, get a faxed release from the applicant, limit answers to specific objective statements, and keep an accurate records of the telephone reference — including the date and time of the call, the questions asked, and the answers given. (For more on objective statements, see box on p. 138.)
In getting a reference over the phone, keeping good notes is also essential. (For a sample form and script, see the insert in this issue.)
5. Use other means of gathering information. In the face of silence, you can also rely on other methods of gathering information about a potential candidate. You can do criminal background checks, credit checks, and state license checks where appropriate, Gilliland says. You should also check with the Office of the Inspector General of the Department of Health and Human Services in Washington, DC, to make sure that no medical staff you hire is on their list of people banned from receiving Medicare or Medicaid reimbursement. Of course, adds Gilliland, those checks will only turn up the worst of the worst, not the people "who just didn’t function too well. But it is a start."
6. Don’t be afraid to say good things. If the employee was a stellar performer, Gilliland says you can rest easy about giving a good reference. And in a way, knowing that most people are following your mother's advice — if you can’t say anything nice, don’t say anything at all — will help you in your hiring decisions. "If they are only telling you that the person worked there and when, you can often take that as a statement that they weren’t the best employee. Otherwise, they’d say so," he says.
On the other hand, Bender notes that positive statements might be used to support a wrongful termination suit. Make sure that what you say is objective and verifiable.
7. Tell the truth. A true statement that isn’t misleading is absolutely protected, says Bender. As long as it isn’t made in a context that could cause you to believe something that isn’t true, you are safe. The white paper from Ingersoll has the following example:
"Bob resigned from his position at XYZ Inc. because he wanted to move closer to his family in Arizona. The day he resigned, XYZ Inc. completed an investigation into a recent theft from the company safe and discovered that employee Charlie stole $1,000. Charlie was fired. When Bob applied for a job at ABC Co. in Phoenix, the company contacted XYZ Inc. to check Bob’s references. XYZ Inc. responded with the following statement: Bob resigned the day that we completed our investigation into who stole $1,000 from the company safe.’ ABC Co. did not hire Bob."
While true, the way the story is told might make you think Bob’s resignation was related to the theft. Truth is not a defense in that case.
There are other defenses against litigation, too, such as conditional and absolute privilege, which might apply in certain cases. Again, Bender says you should check with your own attorney if you have a question about what you might or might not be able to say in a specific case.
8. Check your state law. Some states — and you will want to check with your own legal counsel to see if you live in one of them — are considering legislation that would protect employers from such suits by giving a form of free speech protection to employee references.
Other differences in state law may regulate what information you can release from personnel files, and whether or not you have to tell the former employee you are going to be giving a reference, says Gilliland.
9. Above all, check. "I’m always surprised by the number of people who ask for references, but then don’t check them," Gilliland says. Whatever else you do, call those former employers, as what they say or don't say can help you make a hiring decision that could be the making or breaking of your office.
For more information on reference checks, contact:
John Gilliland, JD, Attorney, law offices of John Gilliland, Crestview Hills, KY. Telephone: (606) 344-8515.
Thomas Bender, Jr., JD, Attorney, Buchanan Ingersoll, Philadelphia. Telephone: (215) 665-8700.