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Words of warning

By Ruben R. Goulart and Sreya Roy

Providing a reference to a past or present employee is often a balancing act. On one hand, providing a reference or recommendation can significantly assist a departing employee in their search for new employment, as the employer benefits from the past employee’s mitigation efforts. Further, in wrongful dismissal actions, a court may award additional damages against an employer if it finds that the employer refused to provide a reference to an employee deserving of one.

On the other hand, providing a reference for a departing employee could expose an employer to significant risks. There is a risk that the employer could face a negligent misrepresentation lawsuit from a subsequent employer, who relied on an inaccurate, incomplete or false reference. Another growing concern is that by providing a reference, the employer may be exposed to defamation lawsuits by the departing employee.

In the recent case of Papp v. Stokes et al, 2017 ONSC 2357 (CanLII), Adam Papp brought a lawsuit against his former employer, alleging wrongful dismissal and defamation. Papp was terminated without cause and asked his former boss if he could use him as a reference. A few months later, a potential employer advised Papp that he was the first-ranked candidate for a position, but that a reference check was still required. During the reference check, the former employer indicated to the potential employer that Papp did not get along well with his supervisors or co-workers. The former employer also mentioned that they were not pleased with the quality of Papp’s work and that if given the opportunity, they would not re-hire him.

Not surprisingly, the prospective employer advised Papp that he would not be offered the position. Subsequently, Papp sued his former employer and former boss for defamation and wrongful dismissal damages.

In Papp, the court applied a longstanding test, which requires that an employee must establish three things in order to prove defamation: 1) the words were defamatory; (2) the words referred to the employee; and (3) the words were published, meaning that they were communicated to at least one person other than the employee. The employee is not required to show that the employer intended to do harm, or even that the employer was careless. However, once an employee establishes these three elements, there are generally two defences available to the employer: (1) the defence of justification, which requires that the employer must prove that the statements were substantially true; or (2) the principle of qualified privilege, which refers to instances where statements made in certain contexts are protected, unless the defendant acted with malice. In Papp, the Ontario Superior Court of Justice confirmed that in this case, the comments were protected under the notion of qualified privilege. It also determined that justification applied.

Similarly, on May 18, 2017, the Ontario Superior Court of Justice in Kanak v. Riggin, 2017 ONSC 2837 (CanLII) again addressed defamation allegations of an employee who was unhappy with the former employer’s reference. The presiding judge found that the comments were protected under the principle of qualified privilege because they were made in the context of a reference check. The court, however, confirmed that the protection of qualified privilege could be lost if the employer’s comments were primarily motivated by malice. Malice includes spite or ill will; any indirect motive or ulterior purpose which conflicts with the purpose of providing a reference; and speaking dishonestly or in knowing or reckless disregard for the truth.

While these cases confirm that the law provides an employer with some protection, it is extremely important to exercise caution when providing a reference. Here are some tips to help you navigate the troubled waters:

Implement a company-wide policy regarding references. This policy should explicitly state that only human resources professionals may provide references for past or present employees. The policy should require managers or supervisors to refer all requests for references to HR.

The employer should proceed with caution when responding to requests for references from former employees who have been terminated for cause. If the employer asserted cause at the time of the termination, then a positive reference may lead to possible contradictions and weaken the employer’s position.

A recommendation through social media (such as LinkedIn) should be considered to be the same as an employment reference and thus, should only be provided by HR representatives in accordance with company policy.

References should always be fact driven, accurate, precise and without malice. References should avoid false flattery or mean-spirited opinions.

References should only be provided upon receiving signed consent from the past or present employee.

Whenever possible, references should be provided in writing to avoid any misinterpretations, and to protect the company against future litigation. 

Ruben R. Goulart and Sreya Roy practice HR law at Bernardi Human Resource Law LLP.

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