Fear of giving a bad reference can get you in legal trouble, too

March 1, 2006

Most employers seek to avoid getting into legal hot water with former employees. So, many avoid answering substantive questions about their former employees, and only confirm dates of employment and position held. The practice is believed to reduce the risk of being sued for slander by the former employee, if the employer gives a bad recommendation.

Most employers seek to avoid getting into legal hot water with former employees. So, many avoid answering substantive questions about their former employees, and only confirm dates of employment and position held. The practice is believed to reduce the risk of being sued for slander by the former employee, if the employer gives a bad recommendation.

But, in the health-care sector, the practice of withholding substantive information about a former employee during a reference check poses another risk: It makes "it harder for a prospective (health-care) employer to make an intelligent decision about whether the caregiver should be entrusted with patients," write Philadelphia-based attorneys Paul Snitzer and Lisa Clark in Modern Healthcare (12/5/2005).

Snitzer and Clark cite two cases that put this legal risk into perspective. In the most recent case, a Louisiana medical center did not provide reference information about a former employee, an anesthesiologist, to a Washington hospital. Although the Louisiana facility suspected that the doctor had abused Demerol, it did not provide this information to the prospective employer. The Washington hospital subsequently hired the anesthesiologist, who then became involved in a botched surgery that left a patient seriously injured. The Washington hospital settled the case with the patient but sued the Louisiana facility, charging that it failed to provide meaningful information about the doctor. A federal judge held that the lawsuit could proceed.

While there's no clear answer on how to avoid the legal risks of providing or not providing references, Snitzer and Clark note that there may be some protection. More than half the states in the nation have enacted reference immunity statutes to protect hospitals or even physician employers from defamation and lawsuits related to reference checks. Although these laws vary by state, they at least provide some protection to health-care employers.