Truth and Consequences: The Quandary of Employment References for Dangerous Former Employees

Employers have responded to such episodes by drafting zero-tolerance workplace violence policies, improving security measures, increasing training of employees, managers and supervisors, and taking other measures as well. These are vital, necessary steps for any employer. But they are only a start. Many issues confront employers, even if their plans and policies work as intended. Among those issues is what to say, if anything, when asked to provide an employment reference for a former employee who was terminated for violating the company’s workplace-violence policy.

When assessing what to say in response to an employment reference inquiry in these circumstances, employers have several alternatives. An employer can tell the truth and risk potential legal claims from the former employee such as defamation or tortious interference with prospective business relations. Employers may also refrain from disclosing such information for fear of a violent response from the former employee. Alternatively, an employer can say nothing, or at least nothing that would indicate a problem to the prospective employer. This “no comment” approach to employment references is increasingly prevalent as the most cautious way to avoid potential claims from former employees.

Unfortunately, some employers, whether consciously or not, provide references that fail to disclose relevant information about an employee’s violent conduct and are misleading. If an employer knows that its former employee presents a potential danger to others, the employer’s misleading reference raises the potential for claims from a subsequent employer or another third party who is harmed by the former employee.

To encourage employers to disclose relevant information about their former employees, several states enacted laws that hold employers immune from civil liability for providing good-faith employment references. More than 30 states now maintain some form of “shield law statute” that affords protection for employment references. But because the vast majority of these shield laws have been around for only a few years, it is still too soon to determine whether they are achieving their desired effect-encouraging open communications among employers and making employment references meaningful by diminishing the threat of litigation.

To address the problems associated with remaining silent, providing no or minimal information, or disclosing the existence of a dangerous employee, employers need to understand (a) the underlying legal principles that point to liability, (b) the effect of an employment reference “shield law,” and (c) their role in preventing or perpetuating workplace violence. These principles are discussed briefly below.

An Employer’s Liability Under Tort Law

Two generally recognized legal principles of tort law provide the background for an employer’s dilemma in providing references. First, the law requires every person to exercise ordinary care in his or her actions for the safety of others. Second, the law will not, without a special relationship or statutory duty, require a person to take some affirmative action to prevent criminal acts by a third party. Applying these principles to an employer’s duty to another employer or third party when providing an employment reference has produced mixed results in the courts.

Other court decisions, however, have held employers liable for negligent misrepresentations in employment references where the employers provided favorable references despite their knowledge of violent or criminal behavior by their former employees. Two compelling decisions provide insight into the parameters of the claim and the inescapable conclusion that the employers would have been better off if they had provided a simple “no comment” response.

In Randi W. v. Muroc Joint Unified School District, 929 P.2d 582 (Cal. 1997), the Supreme Court of California recognized the existence of a claim for fraud or negligent misrepresentation where three different school districts provided letters of recommendation that contained only positive employment references, despite their knowledge of complaints and charges of sexual misconduct against Robert Gadams, a former employee.

According to the plaintiff’s allegations, each former employer knew that Gadams had been accused of sexually touching female students and making sexual remarks to them. Nevertheless, each former employer made recommendations on forms submitted to the Fresno Pacific College placement office, which in turn assisted Gadams in finding work. The forms clearly advised those responding to employment history inquiries that the information provided would be sent to prospective employers.

The employment references remarked: “I wouldn’t hesitate to recommend Mr. Gadams for any position!” and “[I] Would recommend him for almost any administrative position he wishes to pursue”; and they described Gadams as someone who was responsible for making his former school “a safe, orderly and clean environment for students and staff.” Following these glowing recommendations, Gadams was hired as the vice principal of the Livingston Middle School, where he subsequently sexually touched and molested a 13-year-old student.

The court concluded that a writer of a letter of recommendation owes a legal duty to others not to misrepresent facts about the character or qualifications of a former employee. Given the affirmative misleading “half-truths” of the reference letters provided on behalf of Gadams, the court refused to dismiss the claims of fraud and negligent misrepresentation.

Similarly, the Court of Appeals of New Mexico in Davis v. The Board of County Commissioners of Dona Ana County, 987 P.2d 1172 (N.M. 1999), recognized a claim for negligent misrepresentation in the employment reference context. In that case, Joseph Herrera, while working as a detention officer at the Dona Ana County Detention Center, was accused of inappropriate sexual conduct with female prison inmates, and of trading favors for sex. Herrera’s supervisor, Frank Steele, investigated the charges and informed Herrera that he would be disciplined. Rather than face disciplinary action, Herrera resigned. Six days later, Frank Steele wrote a recommendation letter on Herrera’s behalf that characterized him as an “excellent employee” and told prospective employers: “I am confident that you would find [Herrera] to be an excellent employee.”

Similarly another Detention Center supervisor made positive verbal references. On the basis of these positive references, Herrera obtained a position as a mental health technician at Mesilla Valley Hospital, a psychiatric care hospital. Approximately six weeks later, Herrera sexually assaulted and physically abused a female patient.

Relying in large part on the reasoning of the Muroc court, the Davis court held that employers who choose to recommend individuals for employment owe a reasonable duty of care to prospective employers and other third parties. When they fail to exercise reasonable care in their employment references, employers are subject to liability for negligent misrepresentation.

What if They Said Nothing?

The Muroc and Davis decisions relied upon legal principles that impose liability on a person who either intentionally or negligently gives false information to another, for the physical harm that results from an act done in reliance on the information. The necessary element is the existence of some false information. As demonstrated by the foregoing cases, the false information does not need to be an express denial of a particular fact. Rather, the failure to provide relevant negative information about an employee, coupled with the inclusion of positive information, is sufficient to support a claim of negligent or intentional misrepresentation. Yet, neither case would have reached this conclusion had the employers refused to provide an employment reference at all. In fact, the court in Davis specifically acknowledged that the former employer could have avoided all liability by remaining silent. Because New Mexico’s shield law was enacted after the conduct in Davis occurred, it was not at issue in the case.

Employment-Reference Shield Laws

A majority of states now have laws on the books that are intended to encourage employers to give employment references. Although the particulars of the employment reference laws differ from state to state, they generally seek to balance the interests of employees and employers by providing employers with immunity from civil law suits when they provide truthful employment references in good faith to another prospective employer.

One of the desired effects of these employment-reference shield laws is to encourage informed hiring decisions, especially where an individual has exhibited violent or criminal behavior. For example, Delaware’s employment-reference law, the Quality in Hiring Act, covers the disclosure of information on employee job performance, work characteristics, and any act committed by the employee that would constitute a violation of federal, state or local law. As demonstrated in the Muroc and Davis cases, the employers’ desire to avoid a conflict with their former employee caused them to participate in the proliferation of workplace violence.

With the shield laws encouraging the disclosure of information about employee violence, and court decisions condoning employer silence, what is the best business decision for employers? Whether the ultimate decision is to reveal the existence of a workplace-violence problem to a prospective employer, or to remain silent on the issue, an employer’s response should be based upon the relevant circumstances of each situation. The decision should be made consciously and with a sensitivity that the public policy in protecting the safety of workers is one of the central purposes of the employment-reference shield laws.

In any event, if a decision is made to supply a reference, employers must make sure that their references are truthful. Although it may appear to be a “no cost, no risk” decision to agree to provide a favorable employment recommendation for a former employee who has engaged in violent conduct, in fact, it could be very expensive. It is the untruthful reference that creates the most significant legal exposure.

About the author
Robert Palow is president of RP Consultants, a Placentia, CA based company that specializes in labor and employment practices. He has more than 30 years of management and legal experience in the human resource field.