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 California, as in most states, employers are protected from liability for certain types of information they provide to prospective employers. 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 almost always center 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?)
California employers enjoy a qualified privilege when they provide reference information to prospective employers. This means that an employer is immune from liability (cannot be sued) for defamation, as long as the employer provides the information to a prospective employer who requests it and acts without malice. California law specifically states that this protection extends to statements about job performance, qualifications, and eligibility for rehire. However, it does not protect statements about an employee's constitutionally protected speech or activities, nor statements about an employee's union or other concerted activities.
An employer is protected if its statements are based on credible evidence and made without malice. However, the employer can be sued if it knows the statements are false or acts with reckless disregard for their trust or falsity.
California case law also subjects employers to liability for not providing enough information about an employee, if they choose to provide a detailed reference. For example, a school district gave a glowing recommendation for a vice principal who had in fact been accused of sexual misconduct and inappropriate behavior with students. The reference provided unconditional praise for the employee, recommending him "without reservation." When the employee was hired by a new school district and again accused of sexual misconduct with a female student, her parents were allowed to sue the former school district. Although the district was under no obligation to provide a reference for the employee in the first place, once it chose to do so, it had a duty not to misrepresent the facts.
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. California law requires a service letter only for employees of public utility companies; the letter must indicate how long the employee worked for the company and the type of service the employee provided. Other employees don't have a legal right to a service letter.
If you want a former employer to provide more detailed information that the law requires, 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.