Be Careful of What You Say About Your Former Employee…

By Fiona W. Ong - Shawe & Rosenthal LLP

October 25, 2017

Many savvy employers know that a neutral reference policy – in which you confirm a former employee’s position, dates of employment and (maybe) salary – is typically the safest choice for avoiding a defamation claim. After all, if you don’t say much (and what you say is not negative), you can’t be sued. Of course, if you choose to say more and what you say (even if unflattering) is true, then you can also avoid liability because truth is an absolute defense to a defamation claim. But what one employer learned, to its dismay, is that you can still be sued, even if what you say is truthful.

In Shakerdge v. Tradition Financial Services, Inc., after being terminated, a broker filed a complaint with the Connecticut’s Commission on Human Rights and Opportunities (the state fair employment practices agency charged with enforcing Connecticut’s anti-discrimination laws), alleging that she had been subjected to sex discrimination, a hostile work environment, and retaliation. In the meantime, she got an offer of employment from another company.

While in the process of finalizing her written employment agreement, the broker went into the new office and filled out human resources paperwork, and was given computer access and a company e-mail address. In addition, her new employer registered her as broker for the firm with a federal regulatory agency. That evening, however, she got a text from human resources, directing her not to return until her agreement was signed. The next day, she was told that her offer had been rescinded. Another employee at the new employer told the broker that this was because of her legal dispute with her former employer, which he knew because he overheard several human resources staff members talking about her.

The broker sued her former employer, claiming, among other things, that it had retaliated against her for filing a CHRO complaint in violation of Title VII and state law by telling her new employer of her CHRO complaint. Title VII prohibits retaliation by employers against an employee or potential employee “because [the person] has made a charge, testified, assisted, or participated in any manner in an investigation, proceeding, or hearing. . . .” This protected conduct includes filing a complaint of discrimination with the Equal Employment Opportunity Commission or the analogous state fair employment practices agency, as the broker did in this case.

The employer asked the court to dismiss this claim, arguing that a true statement cannot rise to the level of a Title VII violation. The court, however, rejected the employer’s motion, stating that, “a true statement offered in retaliation for protected conduct could qualify as a retaliatory act in some circumstances.” And courts have found that a negative reference (or other communication) to a prospective employer can be considered an adverse action that supports a retaliation claim.

So, the lesson here is that, really, the less said, the better. Even if it’s true.