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Background checks: Prospective employer asking for reference — Is it safe to provide?

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Image taken from: http://www.worldofworklawblog.com

Upon first thought, employers may not be sure what to do when a prospective employer calls asking for a reference on a former employee.

Is it safe to provide a reference when a prospective employer is conducting a background check on your former employee?

Is it worth providing a negative reference given the privacy, defamation or discrimination issues that could arise? What if the former employer provides a “false positive” reference, and the prospective employer hires the person and later feels that it was harmed by the former employer’s failure to provide a truthful reference? Is it dangerous to not be completely truthful about a former violent or drug-addicted employee? Is it unfair to provide neutral information when a high-performing former employee might deserve a glowing reference?

With all these questions, it’s easy to see why employers might hesitate to provide a complete performance-based reference for a former employee, and may instead stick to providing neutral references discussing the former employee’s name, positions held and dates of employment.

Similarly, it’s not difficult to see why prospective employers might wonder about what to ask and what not to ask a former employer about a job candidate during a background check, and the issues that could arise from asking for certain kinds of information about the person.

I recently read a case where a prospective employee interviewed with an employer, and was offered a job conditional on his providing adequate references. The employer called the candidate’s former employer for a reference check and learned that the prospective employee had failed some drug tests and was terminated for this reason. Shortly thereafter, the employer called the candidate back to rescind the job offer because of the failed drug tests.

The prospective employee brought an application to the Privacy Commissioner of Canada, arguing that he expected his former employer to provide information about his employment history and performance during the background check, but not the information about the drug tests. He felt that his former employer should not have provided this information since he had not signed any form that specifically authorized such a disclosure.

In this case, the Privacy Commissioner decided that the former employer could provide the information about the drug tests, and the prospective employer could receive this information, since the information was directly related to the candidate’s work history. Also, it was likely that the candidate had provided express consent to the prospective employer by signing an authorization form that allowed it to investigate his “employment and other related matters as may be necessary in arriving at a final decision” with respect to hiring him. The same authorization released previous employers from all liability in responding to inquiries and releasing information in connection with his application. Unfortunately, since the candidate was not hired, both employers discarded the forms.

The commissioner found neither employer liable in this case, but they took a chance by not keeping anything in writing.

Employers who are interested in providing performance-based references during a background check are recommended to:

  • Provide information that is strictly job-related and based on reasonable evidence that is accurate and verifiable
  • Respond only to the questions asked, and do not add extraneous information about the person
  • Make sure that your answers relate directly to the former employee’s work history and performance (if drug test results or violent behaviour make up part of the individual’s work history and performance, the Privacy Commissioner has found that a former employer can reasonably disclose the information if asked about history and performance)
  • Make sure to get a signed statement from departing employees that releases the employer from any liability for responding truthfully to questions asked during the course of giving references; explain that without the signed release, the company will provide neutral references only
  • Ensure there is a particular person at the company who provides the references, who is trained and understands the importance of carefully handling reference inquiries
  • Provide reference information only to prospective employers after verifying their identities, receiving their request in writing, and receiving the prospective employee’s consent to make the inquiry

On the same note, employers who are interested in requesting performance-based references during a background check are recommended to obtain a candidate’s express consent to ask his or her former employers about the applicant’s previous employment history and performance (put it right on the application form and keep copies of it), and to provide this consent to the former employer if requested.

I’m wondering: does your company have a neutral employment reference background check policy, providing only name, position held and dates of employment of former employees? Have you refused to provide a reference? Does your company use releases for parting employees limiting liability for future references provided?

Christina Catenacci
First Reference Human Resources and Compliance Assistant Editor

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Christina Catenacci

Christina Catenacci, BA, LLB, LLM, was called to the Ontario Bar in 2002 and has since been a member of the Ontario Bar Association. Christina worked as an editor with First Reference between February 2005 and August 2015, working on publications including The Human Resources Advisor (Ontario, Western and Atlantic editions), HRinfodesk discussing topics in Labour and Employment Law. Christina has decided to pursue a PhD at the University of Western Ontario beginning in the fall of 2015. Read more
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