Employer Liability Under Colorado Law When Providing Job References to Current or Former Employees
- November 05, 2014
- by Laura J. Hazen
- Business Tips
Author's Note: We have developed this outline to provide general information; however, some of the information outlined may need to be tailored to the specific circumstances of each position. Thus, this should not be used as a substitute for advice of competent counsel.
Employer Liability under Colorado Law When Providing Job References to Current or Former Employees
Picture this. You terminate an employee with a history of violating internal rules. On the way out the door, she yells and screams and generally makes a scene. A few days later, a competitor and friend mention that your now ex-employee is her newest hire. What do you say?
Often, recipients of "that" call are hesitant to provide any information. Often, I have recommended that employers adopt a policy of confirming "name, rank and serial number", which translates to the human resources world as the date of hire, date of termination and title (possibly ending wage). I stand by that advice when the departure is rife with emotions, gossip or hard feelings. But, when the departure is based upon a safety concern - whether one grounded in workplace violence or the fraud - I suggest that other options should be considered.
Colorado law gives employers a qualified immunity from civil liability for disclosing truthful information about a current or former employee to prospective employers. When an employee is denied a job based on a negative reference, he or she may choose to sue the former employer claiming defamation of interference with prospective contractual relations. The Colorado statute insulates reference-giving employers from civil liability resulting from the disclosure or any consequences of the disclosure. C.R.S. § 8-2-114(3). Further, the law applies to employees, agents, and other representatives of the former employer who were authorized to provide the reference. Id. § 8-2-114(4).
Similar legislation exists in at least thirty states:
- Alaska
- Arizona
- Colorado
- Florida
- Georgia
- Idaho
- Illinois
- Indiana
- Iowa
- Kansas
- Louisiana
- Maine
- Maryland
- Michigan
- Missouri
- Nevada
- New Mexico
- North Carolina
- North Dakota
- Ohio
- Oklahoma
- Oregon
- South Carolina
- South Dakota
- Tennessee
- Utah
- Wisconsin
- Wyoming
The law sets forth a rebuttable presumption that reference-giving employers are acting in good faith, even when providing a negative reference. Employers lose this qualified immunity when an employee can show that the information conveyed in the reference was false, and the employer knew, or reasonably should have known that it was false. C.R.S. § 8-2-114(3)(a)-(b).
Colorado's qualified immunity does not extend to employers who disclose information that they know or reasonably should have known was false. Unfortunately, there are no Colorado cases applying this standard so we don't really know what it means. I would suggest that factually accurate responses - "she was found by the county to be guilty of violating an internal rule", "under her leadership we were put on probation by the State" - would be viewed differently under the law than emotional ones - "she was a rotten employee", "she left our company a total mess."
Some commentators suggest that this standard is similar to an "actual malice" requirement. If that is true, it would require the employee to show that the employer acted with some form of bad motive, evil intent, or intent to harm the person who is the subject of the reference. "Actual malice" also exists when an employer conveys information about the employee with "reckless disregard" for the information's truthfulness.
What can you say? The scope of allowable employer disclosures is broad in Colorado. Employers may disclose information related to: the suitability of the employee for reemployment; the employee's work-related skills, abilities, and habits as they may relate to suitability for future employment; and, the reasons for the employee's separation. C.R.S. § 8-2-114(1).
Both the prospective employer and the former or current employee may request a reference. Additionally, Colorado requires reference-giving employers to provide to the employee, upon request, a copy of any written references. Id. § 8-2-114(4).
While the Colorado law eases liability concerns for reference-giving employers, it is by no means a complete shield from liability. When giving references, employers should provide only truthful, factual information and should avoid offering opinions on current and former employees. "As one commentator put it: "[R]ather than saying 'Joe sexually harasses women,' an employer may wish to say, 'We received several complaints against Joe alleging sexual harassment, investigated those complaints, and found them to be meritorious. Based upon that, we terminated Joe for sexually harassing other employees.'" Id. Employers who provide only factually correct information in reference letters should be immune from civil liability.
About the Author:
Laura J. Hazen is a co-founder of the law firm of H&K Law, LLC. In her employment practice, Hazen provides day-to-day advice and coaching to public and private companies on various employment matters. She also has an active litigation practice where she concentrates on representing business in all aspects of complex business and employment disputes. You can contact her by email at [email protected] or by phone at 303-749-0649.
Author's Note
This article is intended as a general discussion and information on the topic covered and is not to be construed as rendering legal advice. If legal advice is needed, you should consult an attorney. This article may not be reprinted or reproduced in any manner without prior written permission of the author.