How to protect yourself against a disparaging reference

Daniel Lublin is a partner at Whitten & Lublin, Employment & Labour Lawyers.

"If you don't have anything nice to say, then don't say anything at all" is a maxim that applies equally to law as it does to life – except when it comes to providing a bad reference for a former employee. In two recent court cases, employees found this out the hard way.

Adam Papp was let go as an economist at Stokes Economic Consulting Inc. The next day, Mr. Papp e-mailed the president, Ernest Stokes, asking to use him as a reference for future employers. Mr. Stokes gave Mr. Papp the green light.

Soon after, Mr. Papp applied for a lucrative opportunity with the Yukon government as an economic statistician. His interview went well and he was set to get the job, once his references checked out.

Relying on Mr. Stokes's assurance, Mr. Papp listed him as a reference. However, when Mr. Stokes was contacted, he suggested that Mr. Papp was fired in part due to a "performance and attitude problem" and that he had a chip on his shoulder. Mr. Stokes indicated there was "no way" he would rehire Mr. Papp. As a result, Mr. Papp was disqualified for the role.

Mr. Papp sued Mr. Stokes and the company for $500,000 for defamation and punitive damages claiming that the poor reference was unfounded and cost him the new job. However, the law of defamation provides employers with several strong defences. First, if disparaging statements are true, then a former boss or employer is entirely justified in telling the truth. Second, where untrue or otherwise defamatory statements are made in the context of an employment reference, unless the statements were made maliciously or recklessly, the law provides immunity to the party making the statements.

Mr. Stokes testified that, after he agreed to act as a reference for Mr. Papp, he learned from other employees that Mr. Papp could be difficult to work with. Therefore, the judge found that his statements (which were otherwise defamatory) were substantially true. Also, since Mr. Stokes made the statements during a reference check, he could not be successfully sued for slander.

In another very similar recent case, an individual sued her former boss for defamation because a number of statements he made about her during a reference check caused her new employer to fire her.

Although the statements were indeed defamatory, they were also made in the context of a request for a formal reference, and therefore, enjoyed immunity from a successful lawsuit. In order to get around this hurdle, the plaintiff alleged that the statements were motivated by malice, saying her former boss harboured a desire for revenge against her based upon events where she claimed to embarrass him or had shown him to be wrong. But the judge did not believe this explanation and found that the defendant wasn't motivated by any spite or ill-will and that her lawsuit could not succeed.

To the chagrin of many ex-employees, as it currently stands, the law of defamation in Canada makes it nearly impossible to successfully sue a former boss or employer for slander when disparaging and even untrue comments are made in the context of a request for a reference. Collectively, many employers will breath a sigh of relief, knowing they can safely hide behind a broad legal shield should they want to freely speak their minds about ex-employees, but only if first asked to do so as part of a reference inquiry. Especially for this reason, departing employees – and their lawyers – will want to take care to ensure a greater level of protection. Here are some of my own tips:

Pin the employer down. As part of any severance negotiation that I handle, I routinely demand that employers provide a letter reiterating some of the positive statements from past performance reviews and some major accomplishments, if not a full letter of support. I then require that the employer agree to take steps to ensure that any reference request be directed solely to the person who signed that letter, who must agree not to state anything inconsistent. If it turns out that a subsequent reference check goes awry, then at the very least you can sue the employer for violating the settlement, if not defamation.

Choose your references wisely. Former employees have almost complete control over who acts as their reference. If you are unsure what a former manager is going to say, then you're better off not taking a chance. Secure the commitment of someone who can speak to your skill but who you can trust is not going to disparage you.

Save your performance reviews. A successful defamation suit over a reference inquiry requires the defamed employee to prove recklessness, malice or ill-will. If a former manager's critique is inconsistent with his or her own prior written performance appraisal, or one that he or she saw and approved, then not only will his or her credibility and own competence be questioned, malice may well be inferred.

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