Thursday, March 24, 2011

What Can My Former Employer Say About Me if Asked for a Reference?

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Bad Reference No Laughing Matter...
If the Company You Used to Work for Said Something Bad and Untrue About You and it Cost You a New Job, You May Have a Claim Under Pennsylvania Law

The attached Article, from Jim Giuliano of, discusses some approaches on how to handle employee references for perceived “problem employees.” Fortunately, I rarely see his approach in practice. Nevertheless, it got me thinking – I represent many “problem” employees, and they frequently ask me “What is the company going to say about me when it is asked for a reference?”

My standard answer goes something like this: “In Pennsylvania (and in most states), an ex-employer subjects itself to liability if, in giving a reference, it says something untrue and negative about its ex-employees. Therefore, most companies simply state the ex-employee’s date of hire, last day of work, last rate of pay and last job title.”

A Pennsylvania Law, 42 Pa.C.S. § 8340.1, States That a Former Employer May be Held Responsible and Liable to a Former Employee if There is Clear and Convincing Evidence That the Company Gave a Negative, Untrue Reference in Bad Faith

Here is the essence of the Pennsylvania bad employee reference law:

an employer who provides information about a former or current employee’s job performance to a prospective employer “is immune from civil liability for such disclosure or its consequences” in any case brought by the employee, unless the employee can prove by “clear and convincing evidence” that the employer acted in bad faith. The statute specifically defines the four circumstances in which an employee may rebut the privilege, by adducing sufficient clear and convincing evidence that the employer: (1) disclosed information that it knew was false or should have known was false; (2) knowingly disclosed materially misleading information; (3) recklessly disclosed false information; or (4) disclosed information the disclosure of which was prohibited by law.

This is a very difficult standard to satisfy, so, at a minimum, you must have 1) sound, competent evidence that the former employer gave you a bad, untrue reference; and, 2) reasonably good evidence that the bad reference cost you a job opportunity.

What State Laws Protect Employees from Bad References?

Click Here to review a state-by-state list and synopsis of bad employer reference laws.

What Does "Not Eligible for Rehire Mean?

If an employee screening company does background checks on behalf of the potential new employer, one piece of additional information may be gleaned: “Is the employee eligible for rehire?”

The “eligible for rehire” issue is not as significant as one might think, because most departing employees are not eligible for rehire for the following reasons: 1) if they were fired for misconduct or poor performance, the reason is obvious; 2) if they quit the job, the company usually does not want them back (think: jilted lover); 3) if they quit and were given a severance package, they probably signed a release document which typically include a statement that they will not reapply for employment (it’s not personal; this standard language is intended to ward off potential discrimination lawsuits that could arise when a former employee, qualified for a new opening in the company, is passed over for the position).

In fact, it is somewhat rare when a former employee is eligible for rehire, and I see this take place most common only in the following situations: 1) employee is laid off due to lack of work or downsizing; 2) a beloved employee resigns to take a job in a new industry, or with an important, favored company (i.e. a major supplier of goods or services to the former employer).

Since most HR professionals and managers are aware of “not eligible for rehire” policies, the answer to this question is usually only relevant if you told the potential new employer you were laid off (hence, the answer to the eligible for rehire question should be in the affirmative).

The above guidance best applies to when strangers make references to one another. When two friends speak, however, it may be a different story. If one friend tells another friend something bad about you, you will never find out. Since many vocational communities are small, this can be a real problem.

What can you do? When you sense that things are not going well in the workplace, take a realistic inventory of the situation. Realize you are stressed, and you are afraid. And when people feel stress and fear, the result is often anger. This anger seeps out, and creates a maelstrom – something akin to being a fish in a net. The more you struggle, the more tangled you become. So, if things are not going well, you need to accept that, understand that it is an unfortunate and unfair situation that may not be fixable. Talk with your boss, and express your feelings in a polite way. Seek a graceful exit that will guarantee you unemployment benefits and one other thing as well – a letter of reference.

What Should I Ask My Employer to Say in a Letter of Reference?

Short, Informative and to the Point
A letter of reference usually reflects that you are a gracious person held in high regard by your former employer. And, if your boss is called by her friend for a verbal reference, that will be the aspect of your personality she will focus on. Perhaps you were not a good fit with your former employer but at least you weren’t the problem “Joe” (or Jane) discussed in the Giuliano article.

I think the above letter is a fine example of a letter of reference that would impress a potential new employer.

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Anonymous said...

Thank you; your post provides good information on how to answer the question regarding references. I was terminated, in arbitration and receiving unemployment, and I am sure I will not receive a glowing recommendation. Should I explain to perspective employers that I am presently in arbitration or I lost an arbitration case?

Thank you!

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