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Q.
Where I work there's a policy that when a prospective employer
requests information on past employees, Human Resources will only
give out dates of employment and nothing more no matter what the
reason for termination was, since they are afraid of being sued for
giving any negative information. Lots of companies, especially
the larger ones, are worried about lawsuits and have this same
policy. Is this a valid concern?
A. The
short answer is no, this is not a legitimate concern. However,
this question requires more than a short answer.
First, whoever within your company instituted such a program is not
only socially irresponsible, but is additionally either very naïve,
just plain incompetent or has erroneously bought into an urban
myth. The belief that passing on true, but negative
information about past employees is cause for a lawsuit is, and
always has been, incorrect. This misconception belongs exclusively
in the urban legend category.
Many people sincerely believe that over the years a lot of New
Yorkers purchased baby alligators on Florida vacations, then
disposed of them in toilets when they tired of them. This myth
continues that a percentage survived and now the New York sewer
system is overrun by angry twenty-foot-long gators. Another
popular urban legend is the belief that someone invented a
carburetor (or additive or injector, etc.) that guarantees 150 miles
per gallon--but the oil companies bought up the patent. An
urban legend with real staying power is the brand new Cadillac (or
Mecedes, Lincoln Jaguar, etc.) for sale for $100. In this
enduring fantasy, the automobile is in perfect shape, but since the
former owner used a hose to pump exhaust into the car and commit
suicide, the car smells bad and there's no way to get rid of the
foul odor.
Many executives and corporate counselors who chuckle at these other
urban legends, inexplicably have irrationally bought into the myth
that their companies will incur exposure to litigation by providing
true, but negative information about past employees. In fact,
the reverse is true. Businesses cannot be successfully sued
for providing factual documented negative information about former
employees. However, by declining to provide known negative
information liability can be, and should be, created. Here's
some fictional scenarios:
Say an applicant for a controller job at Gato Manufacturing has been
terminated from a similar position at The Rodent Corporation for
embezzlement. During the background check, Rodent
Corporation's Human Resources representative cites the company
policy and only provides dates of employment. Gato
Manufacturing then hires this person, who begins embezzling from
Gato. Ultimately, this person embezzles $200,000 from Gato
Manufacturing and skips the country. It eventually comes out
that this employee was terminated from Rodent Manufacturing for
embezzlement, and if this had been known to Gato Manufacturing, the
embezzler would not have been hired and the losses would not have
occurred. Gato Manufacturing then would likely initiate a
lawsuit against Rodent Manufacturing for Negligent Referral.
Joe Weird was emotionally and mentally unstable, easily angered, and
irrationally hated women in supervision. He had become
physically aggressive on several occasions while working at the
Perro Company.
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