When someone leaves your employ your relationship with them is far from over. Former employee's future job opportunities depend on the references from their past employers and the stakes can be very high. A good reference can mean unlimited opportunities but a poor reference can be the equivalent of being "blacklisted." Just where do you, as a former employer, fit into this equation? Giving references can be a tricky business and finding your policy on this question is essential to your security and health as a company.
There is a growing industry in this country that gathers references not from potential employers but from the former employees themselves. These data gathering companies solicit references while posing as independent companies who are allegedly considering your former employee for future employment. For a fee as little as forty dollars your ex-employees can find out exactly what references you are offering to their future employers. The consequences of a less than sterling reference can mean defamation litigation or negative publicity.
The question to businesses is "how much,how little should we say about someone who has left our company?" You may want to reward good and productive employees who have left your company under positive circumstances with a glowing report of their work history. You may also want to warn inquiring companies about poor employees who failed to produce for you. You may just want to be honest and truthful about all former employees. But what you want to do may not be in your best interest. This is a situation where the truth can come back and bite you. So just where do you stand?
Some employers have a proactive stand and require newly hired workers to sign a release that they will not hold their employers liable for future references regardless of their content. Many employers develop a policy of giving out neutral information regardless of an employee's job history.
One thing that all employers should do is carefully screen reference inquiries. Always ask for two phone numbers from each company, the name and address of the company, and the specific name and title of the person calling. Call both numbers offered and verify that the person you are speaking with is a legitimate employee of the company making the request. If at all feasible, respond only in writing to a verifiable company address. Make sure that you have consulted your own internal personnel records before making any comment on someone's performance.
The vast majority of businesses today carefully restrict the information they give out. If you determine that this is also the policy you want to adopt inform newly hired employees not to expect extensive references when they leave. In this situation, the less you say may be the safest policy. If this is the path you choose you must follow it unilaterally and without exception.
The most common information given is usually limited to hire and discharge dates, job title, and ending salary. Some employers also include a statement as to whether the employee is eligible to be rehired. Whatever information you give out should be the only information you give out. Avoid any comments or small talk that companies will engage you in. Remember, they are seeking information that will be helpful to them in making an employment decision.
As much as you may want to provide that information, you can be held liable for negative comments you may make. While the information you give may be backed up by your own documentation, former employees can pursue defamation action that may or may not be upheld but is guaranteed to cost you money and adverse publicity.
Though you may believe that the truth is the best policy and good employees definitely deserve positive references, neutrality is the safest policy. The essential thing to remember is that your response to each inquiry must be uniform for each employee. Giving a neutral reference for one employee and a positive reference for another may be interpreted as a negative reference.
References are indeed a tricky business and the policy you adopt should be ironclad and fully understood by all employees. With the possibility of legal action, reference questions are truly like being "between a rock and a hard place." You too will be making requests for references and will want as much information as possible. But once understand the position of the companies you are calling you will learn to rely on interviewing techniques and other screening tools. These may be the only reliable tools available to you and every care should be taken to maximize their effectiveness.