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Can A Maryland Employer Be Sued For Giving A Bad Reference?

Thatcher logo.jpgIf you have ever had to fire an employee, you may have wondered just what to say when the call comes asking for a reference for a prospective employer. Sometimes, it wouldn't be fair to withhold negative information from that employer. Are you opening yourself up to liability based on what you say?

Both former employees and potential employers depend on truthful references, but many employers worry they could be subjected to a defamation lawsuit if they provide a negative review. While the risk is real, it is not as serious as some employers fear, thanks to Maryland's qualified immunity statute.

If you're a Maryland employer, you have important protections under state law. Like most states, Maryland provides qualified immunity from defamation lawsuits when employers respond to reference checks in good faith.

Maryland's law protects you from liability for providing certain information about current and former employees upon request by the employee or a prospective employer:

  • General information, such as hire and termination dates
  • Information about the employee's job performance
  • The reason for the employee's termination, if applicable
  • Examples of misconduct or workplace violence, especially if a minor or vulnerable adult was put at risk
  • Information required or requested by a federal, state or industry regulator
  • Information included in annual reports or other legally required documents

In order to bring a defamation claim against you, the employee would have to show, by clear and convincing evidence, that you knowingly or recklessly provided false information or that you acted with actual malice towards the employee. As long as you act in good faith and provide reasonably accurate information, you are immune from liability.

Providing fair, accurate references while limiting risk

If you would like to provide references, whether positive or negative, to departing employees, you should consider taking a few steps to further protect yourself from liability:

  • Seek written permission from the former employee. This could be done during the exit interview or even as part of the initial job application process. You could also ask the departing employee to sign a release of liability.
  • Limit the authority to provide references to one person, if reasonable. This person should review any state laws about references that could apply based on where the prospective employer is located.
  • To avoid potential discrimination claims, the person giving references should use the same process for each one.
  • Avoid answering whether the person is eligible for rehire because the answer is often based on how well-liked the employee was.
  • When providing negative information, limit yourself to facts and documented evidence rather than opinions or allegations.

For a thorough review of your reference policies, contact an employment law attorney.

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