What Employers Need to Know About Employment Verifications

Employment arrangements do not last forever.  You will continue to hire new employees and will want to verify their employment histories.  Similarly, you will be asked to provide employment verification for your former employees.  This sounds simple enough, but what if your former employee left on bad terms?  What if they were terminated?

What are your obligations as an employer when it comes to employment verification requests? When a prospective employer calls you and asks to verify a former worker’s employment, what information should you give them? Are you legally required to provide verification of employment?  Should you say nothing beyond verifying employment dates and job title?

Legal actions are sometimes brought against former employers when a former employee feels they have been defamed during the job reference/verification process.  Therefore, it’s very important to know how to protect your business from the expense and trouble of a lawsuit. Here is what you need to know about employment verifications in Texas.

What the Law Says

Chapter 103 of the Texas Labor Code states that it benefits public welfare when an employer discloses truthful information about a current or former worker. It also states that “an employer may disclose information about a current or former employee’s job performance to a prospective employer.” An employer who discloses information about the employee is immune from civil liability for any damages caused by that disclosure. The only exception is if the disclosure was known to be false and was made with malice or in reckless disregard for the truth.

What this means is that an employer is protected from civil liability unless they make false statements about the former employee. If the employer was to claim that a worker — who was never absent and got good performance reviews — called in sick frequently and performed poorly, Chapter 103 would not apply, and the former employee would have a case that they were defamed by the former employer.

Should You Reveal Negative Information?

Should you tell a prospective employer why your employee was fired?  To limit potential missteps, and resulting claims (whether viable or not), some employers develop a policy that they will only divulge a former employee’s job title, dates of employment, and rate of pay. Others take the position that it is okay to provide unfavorable information that is verifiable.  If you only divulge facts documented in the former employee’s personnel file, such as excessive absences, negative performance reviews, written warnings, and the like, your former employee will have no basis for a defamation suit.

Employer Best Practices for Former Employee Verifications

To protect your company from a potential defamation allegation, it’s best to implement some policies around employee references/verifications.

Designated Employment Verification Team

Depending on the size of your organization, designate a few select administrators who are the only persons authorized to provide employment verifications/background check information, regardless of who the former employee named as their supervisor or listed as their reference.  This should be the case whether the verification is for employment, mortgage approval, or other purposes.  Then, train these administrators how to handle a request for employment verification.

Require a Written Request

When someone calls for an employment verification, you have no real proof that they are who they say they are.  It’s not uncommon for disgruntled former employees to have a friend call their old employer to find out what is being said to the prospective new employer.  When you receive a request for a reference or verification by phone, ask that the request be sent in writing on company letterhead. (If done via email, verify the email address, too.)

Require Written Authorization

Before you disclose any information, require a signed release from the former employee that states you will provide factual employment verification in the future and that in return, they will not sue you for defamation.  A good strategy is to have all your employees sign this release during their exit interview, to prevent problems in the future.  If you don’t already have this policy in place, you can request that the prospective employer obtain the signature and send it back to you for your files.

Include Only Facts in Your Reference/Verification

When verifying employment for a former employee, disclose only facts that are verifiable by documents or testimony.  Don’t give opinions and don’t speculate.

Treat Everyone the Same

To avoid charges of retaliation or discrimination, treat every former employee the same.  This means those that left on great terms as well as those that were terminated.  If you don’t think this is feasible, you may want to provide only job title, employment dates and salary in your employment verifications.

Contact Our Frisco Employment Law Attorneys Today

Responding to job reference requests and employment verifications may seem tricky. But following our best practices should help your organization steer clear of trouble.  If you need help with any employment or business law matter, the Frisco employment lawyers at Simon | Paschal PLLC can help. To schedule a consultation, call (972) 893-9340 or contact us online.

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