NEGLIGENT EMPLOYMENT VERIFICATION

BUSINESS TIPS

3 pages, posted 7/99

NEGLIGENT EMPLOYMENT VERIFICATION: REDUCING THE EXPOSURE 

Many top executives who scoff at old diehard urban legends such as the alligators in the sewers, the guy with an ax in the back seat--and even the commonly believed (but untrue) "Good Luck Mr. Gorsky" comment which allegedly followed Neil Armstrong's "One step for man" lunar transmission--have inexplicably bought into the equally erroneous notion that providing true, but negative information on former employees opens them up for a lawsuit.

In fact, company policies which provide for disclosing only dates of employment and nothing else may provide exceptional and unnecessary exposure to litigation in many venues--not just from future employers, but from past employees as well.

For example, a person terminated for documented violence, proven theft, confirmed drug use on the job or proven fraud or embezzlement could obviously pose a substantial risk to subsequent employers or future coworkers.  If an adverse event occurred in the future where this former employee repeated the unacceptable activity occurring at the former place of employment, it could be said the event would have been foreseeable--and therefore prevented--if the former employer had been more candid in responding to reference requests.

Some companies unaccountably, go so far as to work deals with employees who have demonstrated their dishonesty or violence, perhaps fearing wrongful discharge suits.  Rather than being terminating for cause, these miscreants are allowed to resign.  As a part of such deals, they may even leave with vaguely worded reference letters.

In many venues failure to provide a reasonable amount of information on a former employee who has demonstrated violence, drug use, serious dishonesty or even substantial sexual harassment is more that just socially irresponsible, it is grounds for a successful lawsuit by subsequent employers who suffer losses caused by such employees.  Negligent referral and other litigation of this nature is on the increase.

(In some areas, of course, even the former employee can be sued by the future employer in cases involving compelled self publication.)

There are still a few venues where a business is clearly immune to suits by future employers when consistently providing no employment verification information except dates of employment.  In these venues, however, exposure still exists from the former employee.

When a company policy prohibits divulging anything but employment dates, this is usually clearly understood and adhered to by human resources employees.  Normally such a policy is well known to all employees and in many cases it is spelled out in employment contracts and personnel manuals.

However, any experienced investigator knows that when conducting a background investigation on an applicant, the information obtained from human resources will be pretty basic.  Self-starters and otherwise exceptional employees will often be just numbers to these folks, as will the less desirable workers; and it is usually impossible to distinguish between potentially exceptional assets and liabilities.