If you’ve lost your job, you may be concerned about what your former employer will say to companies that ask for a reference. References often make the difference between landing a new job and receiving a rejection letter. If a former employer is giving out false or misleading information about you, it could doom your job search.
In Delaware, as in most states, employers who give references have some protection from lawsuits. As long as the employer acts in good faith and doesn’t go beyond what the law allows, the employer can’t be sued for defamation. However, if a former employer acts maliciously or otherwise crosses the legal line, and you lose job opportunities because of it, you may have a legal claim.
In a defamation lawsuit, the plaintiff (the person bringing the lawsuit) alleges that someone made false and damaging statements about him or her. In the context of employment, defamation claims nearly always focus on statements the employer makes about the employee once the employment relationship ends. Typically, a former employee claims that the employer made false, negative statements about the employee’s performance to a prospective employer who called for a reference, and the prospective employer decided not to offer the employee a job (or to rescind a job offer) because of the poor reference. (To learn more about defamation claims, see Defamation Lawsuits: Do You Have a Case Against a Former Employer?
A Delaware employer may provide certain reference information to a prospective employer without fear of legal liability. An employer may provide information on:
Delaware law presumes that an employer acts in good faith in providing these types of information, unless:
If any of these exceptions apply, the employer has acted in bad faith and is no longer protected from lawsuits for defamation.
While some employees wish their former employers would keep quiet, some employees face the opposite problem: They want a former employer to provide information, but the employer isn't willing to speak up. Some employers are so fearful of defamation claims that they won't give references under any circumstances.
To remedy this situation, some states have enacted service letter laws. These laws require employers to provide former employees with certain basic information, in writing, about their employment. Delaware has a service letter law of sorts, but it differs from other state service letter laws in a couple of ways:
Employers in these fields may not hire an employee without getting a service letter from the employee's most recent employer and every other employer for whom the employee has worked in the last five years. The service letter must provide information on the type of work the employee performed; how long the employee worked there; the reasons for the employee's separation from employment; and any substantiated incidents of violence, threats, abuse, or neglect by the employee, including any disciplinary action taken against the employee as a result of such incidents. The state labor department has a form employers can use for this purpose.
The employer who is required to request a service letter must get the employee's written consent and release, along with a complete list of employers. An employer who provides the information required in a service letter is immune from lawsuits (that is, the employer may not be sued) for defamation, libel, and slander.
Penalties and fines may be imposed on:
For employees who are not in the health care or child care fields, former employers are not required to give a reference. If you want a former employer to provide information about you to prospective employers, you might consider signing a release: an agreement giving the employer permission to respond to prospective employers who call for a reference, and giving up your right to sue the employer for anything said as part of that process.
However, this makes sense only if you are absolutely certain that the reference will be positive. It may be worth giving up your legal right to sue in exchange for a reference that will help you land a position, but you don’t want to sign away your rights only to find that you have no recourse against a former employer who damaged your reputation and job prospects. For more information, see Getting Good Job References. For information on your legal rights during the hiring process, see Nolo's articles on Getting Hired.