Disclosure or Nondisclosure:
When Should Employers Be Required to Warn? Finding employment in a time when jobs are limited and competition is fierce can be a very stressful process for any job seeker. Having the required skills, knowledge, and education is simply not enough to make a person the most qualified candidate. References from past jobs are also needed and are very important in helping prospective employers determine which applicant is likely to bring the most productivity to the company. However, to avoid defamation liability, employers are very careful about what information they provide pertaining to current and former employees. Lawsuits for defamation have caused companies to be less forthcoming, and will usually only provide minimum information such as the former employee’s salary and the dates they were employed with the company ” (Beatty, Samuelson, & Dean 705). Specifics about past performance and behavior on the job are not given most times, as employers are not necessarily required to provide this information. Under circumstances in which violent behavior has been evident, employers may be obligated to release such information as part of a job reference and nondisclosure could render them liable should an that employee inflict harm on some third party. Weighing the implications of disclosure and nondisclosure can be helpful for employers when contemplating the course of action to take in times when the duty of disclosure is in question. The Human Resources department at Stuff-Mart has a valid concern for determining exactly what information they should provide about their three problem employees in employment references. Should they reveal the employees’ behavioral issues and as a result, the prospective employers no longer consider these individuals as viable candidates, Stuff-Mart could find themselves battling defamation claims. Defamation in employment is considered a tortious act and the law holds employers liable for committing these actions (Beatty, Samuelson, & Dean 704). In order to prove a defamation case, a plaintiff must show an employer acted “maliciously” in giving “false and potentially disparaging remarks” about them in an employment reference (Buckhalter 272). According to Roger B. Jacobs in Labor Law Journal, defamation can be libel or slander and occurs when the following elements are present: “(1) a communication which is not privileged; (2) a communication which is false; (3) injury to reputation; (4) publication or the communication to a third person” (567). There are possible defenses available to employers should they reveal information considered to be defamatory about employees to prospective employees: absolute privilege and qualified privilege. Absolute privilege provides complete protection and freedom to disclose defamatory information, even with malicious intent and exists in four forms: (1) Legislative; (2) Judicial; (3) Executive; (4) Domestic (Jacobs 567). Qualified privilege is more conditional and only affords protection against defamation claims when such information is disclosed with the absence of malice intent (Jacobs 567). This type of privilege is a more likely defense for employers than absolute privilege. National Paralegal College explains the elements of qualified privilege in the following: (1)The defendant must reasonably believe that an important interest is threatened. The threatened interest can be his own, the interest of the person he is publishing to, or any other third person. (2) The defamatory statement must be relevant to the interest that the defendant is trying to protect. The relationship can be a business relationship as well as a familial one. (3)The defendant must publish the defamatory statement to a third person who the defendant thinks will be able to protect the interest that the defendant is trying to protect. Should Stuff-Mart choose to disclose and these three elements are identified, they may be protected against defamation under qualified privilege. Should they decide to provide only the minimum of employment dates and salary, they could face lawsuits with claims based mainly on negligent referral and misrepresentation theories. The theories imply that an employer’s failure to provide complete employment references “increases the risk that a bad or dangerous former employee may be hired by a company that is unaware of the employee's negative history”, and unfairly puts the new employee at risk for possible negligence hiring (Hornak). One such case in which an employer was sued for negligent employment referral was that of Jerner v. Allstate Ins. Co., No. 93-09472 (Fla. Cir. Ct. 1995). In this case, the defendants failed to provide information on Paul Calden, a former employee who was fired for bringing in a gun to work on more than one occasion, to Fireman’s Fund Insurance Companies during an employment reference (Jerner). Calden displayed other behavior labeled as “bizarre” during his employment with Allstate, which was never disclosed to Fireman’s Fund and in fact, Allstate even provided a recommendation to Fireman’s Fund. After Fireman’s Fund terminated Calden for behavior similar to what had been displayed at Allstate, Calden went on a shooting spree, killing three of his co-workers and wounding two (Buckhalter 278). The Plaintiffs, who were the family members of the victims killed and injured by Calden, took action against Allstate for their failure to warn of Calden’s potentially dangerous nature. The Court ruled against Allstate, finding that due to their knowledge and observance of Calden’s behavior while employed with their company, they had an obligation to reveal this information to Fireman’s Fund (Jerner). Allstate ultimately paid an undisclosed amount in punitive damages to the plaintiffs (Buckhalter 279). Another case involving negligent referral and misrepresentation claims, but with a very different outcome, is that of Richland Sch. Dist. v. Mabton Sch. Dist., 45 P.3d 580, 586 (Wash. App. 2002). The defendants, Mabton School District, withheld information about a former employee’s sexual misconduct charges involving children. Jesus Caballero, a janitor within the Mabton School District, was arrested and charged with three separate counts of child molestation (Richland). In exchange for his resignation from his position with the school district, these charges against Caballero were dropped “with prejudice” by the state (Caselaw.com). Caballero had also been reprimanded on a number of occasions for inappropriately conversing with the high school students at the school he worked, however, Mabton provided three letters of recommendation for Caballero, none of which made mention of the sexual molestation charges filed by the state or the disciplinary actions against him at the school (Richland). Richland claimed Mabton had a duty to disclose this information due the fact that Caballero’s position, again, would around minor children, and that they breached this duty by withholding his sexual involvement with minors (Richland). The Court ultimately ruled in Mabton School District’s favor and issued a summary judgment Richland failed to prove Mabton’s duty to disclose under the negligent misrepresentation theory (leagle.com). The Gutzan v. Altair Airlines, Inc., 766 F.2d 135 (3d Cir. 1985) is noted as being the “earliest published case” involving a negligent employment claim (Buckhalter 274). The defendant employer, Altair, hired defendant Joseph W. Farmer by way of an employment service and also defendant Romac & Associates (Gutzan). Farmer was a former service member who had served prison time for an “alleged” rape while on duty in Germany. Farmer explained away the rape charge and sentence as simply a standard procedure the military followed in the event a member is accused of such a crime and it involves a foreign national of the country he is serving in at the time (Buckhart 274). Romac did do a background check with the military concerning the charge and subsequently recommended Farmer to Altair, however, they failed to acquire full details of Farmer’s incarceration and after a year with Altair, Farmer committed assault and rape of a female co-worker (Richland). Shortly after if was revealed his military rape charge and incarceration was actually for that of a female military co-worker. The plaintiff, Rosalie Gutzan, first sued Altair for negligent misrepresentation, whom she eventually settled with out of court, but later amended the lawsuit to name Romac also as defendants. Her claim was Romac was negligent because they failed to fully investigate Farmer before recommending him to Altair (Buckhart 275). HR departments should ensure that they have a clear and concise policy outlining exactly what information shall be provided in employment references and get the employee’s consent by having them sign off on the policy (findlaw.com). HR departments should also ensure that all employee profiles are complete, but also objective. By following these steps, employers can lower their risk of facing negligent referral and misrepresentation claims as well as defamation claims.