Truth or consequences, Alaska: honesty best policy for references.

• Author: Curry, Lynne
• Position: HR Matters

When you terminated Carl, he threatened to sue you. To avoid trouble, you gave him a month of severance pay and provided him a bland yet positive letter of reference. Will your reference letter backfire on you when the next employer that hires Carl finds out he interviews better than he works?

When Katherine quit, you felt glad to be rid of such a toxic employee. Then you receive a call from a prospective employer you know well. You wouldn't wish Katherine on your worst enemy. Should you tell the truth?

TRUTH CARRIES LITTLE RISK

As a supervisor, what risks do you take when you provide negative information on former employees? Do you incur a risk when you write letters of reference--even positive ones?

According to the American Business Law Association study on defamation suits and plaintiff's awards, managers fearing defamation suits when giving bad references risk little. Few defamation cases make it to trial and the former employee plaintiffs lose 75 percent of these cases. Further, Alaska Statute 965.160 provides good faith protection to employers who give factual, though negative references. Disgruntled former employees have to prove "clear and convincing evidence" of negligence or bad faith on the part of their former employers to win defamation suits.

LIES ARE LITIGABLE

In contrast, employers provide falsely positive references or fail to give prospective employers negative information about former problem employees take on potential liability for problems their honest disclosure could have prevented.

As an example, a Florida judge ruled Allstate Corp. could be sued for punitive damages for concealing a former employee's potential violence. Allstate management fired an employee for bringing a gun to work yet wrote a recommendation letter stating the employee was let go as part of a corporate restructuring. Fireman's Fund Insurance Co. relied on Allstate's recommendation and hired the former Allstate employee who then shot five coworkers in the Fireman's Fund cafeteria.

In another landmark case, a school vice principal received praise and positive letters of recommendation from three former school districts, despite being involved in...