A significant potential liability faced by employers is defamation. To defame someone is to make a false statement that injures the person’s reputation. A written defamatory statement is known as libel. A spoken defamatory statement is slander. In order to have a legitimate defamation claim the false statement must be communicated to a third person either in writing or orally. Generally to be defamatory the statement must be one of fact. Usually statements of opinion are not considered defamatory.

Job references often present a problem relating to defamation. Section 91B.2 of the Iowa Code provides potential immunity for information provided by employers about current or former employees.

1. An employer or an employer’s representative who, upon request by or authorization of a current or former employee or upon request made by a person who in good faith is believed to be a representative of a prospective employer of a current or former employee, provides work-related information about a current or former employee, is immune from civil liability unless the employer or the employer’s representative acted unreasonably in providing the work related information.

2. For purposes of this section, an employer acts unreasonably if any of the following are present:

a. The work-related information violates a civil right of the current or former employee.

b. The work-related information knowingly is provided to a person who has no legitimate and common interest in receiving the work-related information.

c. The work-related information is not relevant to the inquiry being made, is provided with malice, or is provided with no good faith belief that it is true.

Rather than run the risks many employers have a no comment policy whereby they give only the dates of employment and positions held. This is not particularly helpful to a prospective employer and it may actually hurt the employee’s chances of getting the position because enough information is not known. In a bizarre twist some employers have actually been sued by prospective employers for not providing pertinent information regarding the current or former employee.

One potential solution is to adopt a no comment policy but to make an exception where the current or former employee approves in writing the employer providing a reference and release the employer from any liability associated with issuing the reference.

Whatever policy is adopted be sure you communicate it in writing to employees in the company handbook and follow it faithfully. The policy should identify those in the company that are authorized to give references and it should prohibit everyone else in the company from doing so.