Surprise! Illinois Employers May Give Out Bad References about Former Employees!

July 2011

By: Nancy E. Joerg, Esq.

Yes, under Illinois law, an employer can give out negative information about a former employee in a job reference (as long as the information that the employer gives is truthful and related to the employee's job performance). For example, an Illinois employer may say that an employee was fired by the company because this is a truthful statement and related to the employee's job performance.

Illinois has a "pro-employer" law called the Employment Record Disclosure Act (it became effective June 13, 1996) under which employers are provided some measure of protection from civil actions if the employer provides truthful performance related information about an employee or a former employee in response to an employment reference inquiry. The employer may provide both truthful written or verbal information under this law. The law also provides some protection when the employer gives information that it believes in good faith is truthful.

The presumption of good faith for employers or ex-employers established under this law may be "rebutted" by a "preponderance of evidence" that the information was knowingly false.

Despite this law (which only operates as a defense to an employer and cannot prevent a lawsuit for defamation), many companies in Illinois have a neutral reference policy whereby they only provide the ex-employee's dates of employment, job title and job duties. Nothing more.

Employers in Illinois should be extremely careful if they decide to give negative references on a past employee. Employers should be certain that the information it is disclosing is truthful, strictly related to the unsatisfactory job performance in question, and can be substantiated by the former employee's personnel file.

If an Illinois employer receives a telephone call from an individual seeking a job reference on a past employee, the safest route is to simply say "I'm sorry but our company has a policy of only giving very restricted neutral reference information. So, all we can tell you is the individual's dates of employment (i.e., date of hire and date of separation), job title, and job duties. That is all we can share."

Even if the caller tries to put pressure on the company for more information about the ex-employee, stick to your guns and just repeat that the company has a policy of neutral references.

Some employers actually want to give positive references on ex-employees. This course of action is usually fine, but it does entail a certain amount of legal risk in that there have been lawsuits for "negligent referral." In negligent referral cases, a company sues a prior employer for inducing the company (via positive referral) to hire an individual who turns out to be very unsatisfactory in one way or another.

Questions about this topic or other management-side labor and employment law issues? Please contact WS Shareholder and Senior Attorney Nancy E Joerg at 630-377-1554, najoerg@wesselssherman.com, or visit our website.