Overview: Inevitably, employees will leave an organization, whether the departure is retirement, resignation or employee termination. In many cases, HR must still deal with post-employment inquiries regarding ex-employees, which can be another area of exposure if inquiries are not handled properly.
To guard against exposure, many employers implement a "no references" or "limited references" policy. Both of these methods are effective in reducing exposure from post-termination inquiry claims like defamation. However, a "no references" policy may paint the employer in a bad light, particularly if ex-employees or other organizations perceive that the employer is not being cooperative in assisting an ex-employee to find a new job.
In that regard, a "limited references" policy - restricting reference material to factual information only - is a better approach. There are no federal or state laws that restrict employers from providing truthful, accurate, job-related information regarding ex-employees to potential employers. And when it comes to claims for defamation brought by ex-employees, the truth is always the best defense.
Trends: Claims for defamation are interpreted similarly in most jurisdictions, but employers should still familiarize themselves with how defamation claims are addressed in their state. Thorough and accurate personnel records may go a long way toward substantiating the truthfulness of an employer's post-termination recommendation. If the employer can produce contemporaneous records supporting the legitimacy of the information included in a communication to a potential new employer, it can build an extremely effective defense against claims for defamation.
Author: Michael Jacobson, JD, Legal Editor
In-depth review of the spectrum of Arkansas employment law requirements HR must follow with respect to process of termination.
This briefing for supervisors provides a protocol and best practices for employee termination, from the disciplinary process through to the post-termination period.
An employer may use this form to build or reach a severance or "termination" agreement with an outgoing employee when the employer is either contractually bound to provide severance or it determines that providing severance is in its best interests. Common scenarios in which employers elect to provide severance are when they desire a (mostly) clean break with an outgoing employee, they desire to maintain good relations with the outgoing employee or when the employer desires some protection from the outgoing employee against risks associated with litigation, competition or security.
A severance or termination agreement is a very effective tool for an employer to use to make a mostly clean break with outgoing employees. However, there are important restrictions on the type of consideration employers can ask for as part of severance or termination agreements. This How to will help employers walk through the process of negotiating and drafting such an agreement and can be useful in protecting the company and ensuring the agreement is enforceable in a court of law.
HR guidance on risks in responding to post-employment inquiries and ways to manage inquiries while guarding against exposure to defamation claims.