You can be held liable for defamation of character without having distributed a single piece of information on a former employee. Liability has been found under the claim “defamation by compelled self-publication.”
This occurs when a job seeker is compelled to tell a prospective employer about negative information, allegedly untrue, in the former employer’s personnel file. The theory runs that if the job seeker does not tell the prospective employer about the negative information, the prospective employer will discover it upon calling the former employer and presume that the job seeker was trying to hide something. According to the theory, the job seeker has no choice but to defame himself to avoid this negative presumption.
The California case Davis v. Consolidated Freightways, Inc. provides guidance in protecting yourself against this type of claim.1 In this case, the appeals court refused to hold the employer liable for the former employee’s alleged compelled defamatory self-publication. The company had a strict policy against giving out any information to prospective employers about former employees except their dates of employment. Because of this strict policy, the court held the former employee was not compelled to self-publish the reason for his discharge because the company would not have given out this information in any case.
As this decision shows, you should maintain a strict policy on providing references. This policy should be made known to employees, via a handbook or company memo, so employees will not have a reasonable belief that they are compelled to self-publish defamatory information.
1.Davis v. Consolidated Freightways, Inc., 29 Cal. App. 4th 354 (1994)