Recommend at own risk: employers face a new quandary: what information should they give out about former workers?

0 Comments | Insight on the News, Sept 2, 1996 | by Jeffrey R. Sipe

Employers face a new quandary: What information should they give out about former workers?

Name, rank and serial number," says Sheryl Willert, a managing partner in the Seattle law firm of Williams, Kastner and Gibbs. "That's what I used to advise my clients."

Willert's clients are not prisoners of war. They are executives, administrators and managers groping with the troubling issue of confidentiality. Employers are leery of releasing too much information about former employees lest they find themselves embroiled in defamation suits.

The danger is not in losing the suit, says Eric Pelton, an attorney with the Detroit firm of Dickinson, Wright, Moon, Van Dusen Freeman, but in mounting an expensive defense in court. "These suits are expensive," Pelton tells Insight. In most instances, defamation charges are "throw-in claims" tacked onto plaintiffs' suits for discrimination or wrongful discharge. "It's just one more charge they choose to include," says Pelton.

Defamation suits brought against previous employers are difficult to win, especially because the transfer of information between former and potential employers is governed by "qualified privilege." The concept even allows a former employer to make a defamatory statement--if the statement is made in good faith. "Qualified privilege could be lost, however, if the information is made available to people outside of the hiring process," cautions Pelton, "or, perhaps, the information concerns activity not work-related. There could also be a problem if malice is involved; a reckless disregard for the truth."

Ironically, one of the most important cases in this area of law concerned an employer who released too little, not too much, information concerning a former worker. An employee of the Livingston Unified School District in California was fired for molesting schoolchildren. Although he had provided the name of his former employer -- another school -- to Livingston, that school had followed the "name-rank-serial number" guidelines -- omitting charges by students that the worker had molested them. The court ruled that the previous employer was wrong in withholding such information -- that in essence, it was being untruthful.

Diane Malanowski, director of human resources at Find/SVP, a New York-based market-research firm, expresses the dilemma this way: "You basically have to weigh getting sued for giving out too much information against getting sued for giving out too little information."

Recent legislation passed in 25 states (with bills pending in Pennsylvania and Rhode Island) is designed to calm such fears, providing employers with varying degrees of protection against defamation suits and other claims. To some extent, the new laws were triggered by a suit brought against Allstate Insurance Co. An executive of that company allegedly wrote a recommendation for an employee who had been fired after coming to work with a gun. The recommendation said that he was let go as part of a corporate restructuring. The employee, Paul Calden, was hired by Fireman's Fund Insurance Co. in January 1993. He later shot five coworkers in a cafeteria, killing three, before committing suicide.

"Gone are the days when name, rank and serial number or no comment will suffice," concludes Willert, former head of the Defense Resource Institute's Employment Law Committee. "Employers must be careful to seek thorough information regarding prospective employees and be thorough in providing information to prospective employees to avoid liability." She adds, "I'm advising my clients to obtain a complete release of liability. Then if another employer asks questions, information from a personnel file can be released [with no danger of litigation]."

Still, as the director of human resources for a Texas-based natural gas company (who asked to remain anonymous) tells Insight: "I never solicit an opinion on job performance.... Everybody is very careful."