Referral of ex-employee can raise legal risks
When a past employee left your organization under questionable circumstances, or with a history of suspicious behavior, it is important to be honest with the next employer who asks for a referral. Experts say an honest referral is the best way to stop a health care worker who moves from one employer to another and eventually harms a patient intentionally. But how can you tell the truth without inviting a lawsuit?
You can if you're careful about how you respond, says Kenneth N. Rashbaum, JD, an attorney with Sedgwick Detert in New York City. The fear of reprisal currently limits the disclosure of essential information and frustrates the employer who is left holding the bag when the criminal behavior is finally discovered. The reluctance to say anything negative about former employees is not unjustified, Rashbaum says, but there are ways to change this pattern.
An employee who received a bad referral from your organization can sue for defamation, invasion of privacy, or civil rights claims he alleges if the bad referral was for filing a discrimination claim or a whistle-blower claim. Even a seemingly good reference can result in a lawsuit — a "negligent references" claim — if the employee says you only gave half of the story and left out information that would have made him or her look better to the new employer.
So what's a risk manager to do? Rashbaum says risk managers may have to take the lead in encouraging more honest referrals, and expect your counterparts in human resources and legal to resist.
"This is what we do. We know there's a risk from not telling the truth to other employers, and we need to find a way to change that," he says. "But human resources and legal counsel have their own concerns that are just as valid, so you have to work with them."
Rashbaum says risk managers should work with the other departments on these tasks:
- Check with legal or outside counsel for the privilege statutes in your state.
- When possible, obtain consent for the reference.
- Give the reference letter directly to the employee.
- Train the specific people authorized to respond to reference requests. Any request for a reference must go to one person or one team of people who know what to say and not say.
It is important to check your own state's laws requiring references to see what is protected and what limitations might apply. For instance, North Carolina provides immunity from civil liability unless the information disclosed was false and the employer knew or should have known it was false.
In New Mexico, however, state law says employers may face liability for "incomplete referrals" if more than just the name and dates of employment are given.
"So in New Mexico, you have to either provide nothing but name and dates, or you have to provide a full and accurate picture," Rashbaum explains. "An incomplete report can be only half the story and be construed as negative."
When a past employee left your organization under questionable circumstances, or with a history of suspicious behavior, it is important to be honest with the next employer who asks for a referral.You have reached your article limit for the month. Subscribe now to access this article plus other member-only content.
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