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Your company has looked at the resumes and conducted the interviews.
Should you check the references before
deciding on which candidate to hire? Of course. Although there are
very few reported cases of legal liability, "negligent hiring"
always leads to costly operational and productivity problems.
When negligent hiring does lead to legal liability,
it is because the employer knew, or should have known, about an
employee's propensities to cause a particular problem that he later
causes. When checking references, even if prior employers will only
give you the most minimal information, like dates of employment,
positions and compensation, it will at least confirm or contradict
information obtained from resumes and interviews. It will also tell
you that the prior employer is not passing on glowing accounts of
performance. The problem is: You can't tell whether the candidate's
performance didn't match expectations or whether there was some
other reason that would have no effect on your hiring decision.
Many employers stick to the "name, rank
and serial number" approach to giving references because they
fear incurring some form of legal liability if they provide more
information. While they are correct, they can't get into trouble
that way; in reality, that fear is almost always baseless, particularly
if the employer has kept good human resource records and sticks
to the facts.
Legal claims by former employees about references
are uncommon. If a claim is made, it will most likely be a defamation
claim—and those are terribly difficult for plaintiffs in New
York. For starters, the plaintiff must have the exact words used
or he can't bring a claim. In addition, the plaintiff must prove,
among other things, that the statement is factually false (as opposed
to an opinion).
If the plaintiff can prove all that, there is
still a "qualified privilege" for employers to communicate
this type of information to someone with an "interest,"
such as a prospective employer checking references. This qualified
privilege means that even if the prior employer provides factually
inaccurate information that is defamatory, the plaintiff still doesn't
have a case unless he can prove that it was done with malice.
When a prospective employer does its own reference
checking, it can do so without any restrictions. The company's records
should include the substance of the information provided by the
reference, since the
company will want to refer to it if it made a difference in the
hiring decision and the company receives a discrimination claim.
If the prospective employer decides to retain
an agency to check and report on references, the Fair Credit Reporting
Act comes into play. This federal statute contains requirements
that must be met, even though
the references may have nothing to do with the candidate's credit.
There are two different types of reports.
A "consumer report" provides general
information about an individual's creditworthiness, general reputation,
personal characteristics or mode of living. An "investigative
consumer report" provides information that is derived from
personal interviews with friends, neighbors or associates.
The employer's obligations differ, depending
upon the type of report. Among the requirements are notifying the
candidate, getting certain written authorizations and certifying
to the credit reporting agency that the report will be used for
a permissible purpose under the act, that it will not violate any
equal employment opportunity laws and that the candidate has been
notified.
If the employer doesn't hire the candidate based
upon information contained in either type of report, it must provide
the candidate with a copy of the report and a written summary of
his rights. The employer must also provide the candidate with the
name, address and phone number of the credit reporting agency. It
must provide a statement that the credit reporting agency did not
make the hiring decision and cannot explain why it was made. The
company must also tell the candidate that he has a right to obtain
a free copy of the report from the credit reporting agency within
60 day, and a right to dispute the accuracy or completeness of the
file on which the report was made.
Employers that furnish information to credit
reporting agencies also have obligations under the Fair Credit Reporting
Act. They must avoid reporting information that they know (or consciously
avoid knowing) is
inaccurate. They must update information. In cases when they are
notified of a dispute about the completeness or accuracy of information
they have provided, they must conduct an investigation and report
the results to the credit reporting agency to which they had provided
the
information within 30 days.
Reference checking is always worthwhile. Be
sure to keep good records, and when using outside reference checkers,
be sure to comply with the Fair Credit Reporting Act.
Copyright(c) American City Business Journals Inc.
All rights reserved.
You can view this article on the web at:
http://www.bizjournals.com/industries/business_services/human_resources/2002/09/30/albany_focus4.html
©2002 TABIC. All rights reserved.
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