Reference Laws in North Carolina

Learn when North Carolina employers are protected from defamation lawsuits for giving a reference.

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Are you looking for a new job? If so, you may be concerned about what your former employer will say to companies that call to ask for information about you. 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 North Carolina, employers who provide reference information to prospective employers are protected from legal liability, in some situations. If 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.

References and Defamation Claims

To prove defamation, the plaintiff (the person bringing the lawsuit) must show 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?)

North Carolina Reference Laws

A North Carolina employer is immune from liability (that is, the employer may not be sued) for providing information about an employee’s job history or job performance when asked to provide a reference by the employee or a prospective employer. Job performance includes information about the employee’s:

  • suitability for reemployment
  • skills, abilities, and traits as they relate to the suitability for future employment, and
  • reasons for discharge or separation.  

The employer loses this immunity (and can, therefore, be sued for defamation) only if the employee can prove that the information provided by the employer was false, and the employer knew or should have known that it was false.

Getting a Reference

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. North Carolina does not have a service letter law, however.

If you want a former employer to provide a detailed reference, 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

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