If you left your last job in good standing, you are likely hoping to keep professional connections with that employer in the future. These become especially important if you decide to seek employment again. Having a former employer provide a reference can make a big difference in your ability to earn a new job.
However, many employers are hesitant to do this, and human resources departments will often institute company policies that forbid employees from giving any references, beyond verifying an employee's tenure dates at the company.
Why would they do this? Employers are afraid of having any policy that allows people within the company to give out employee references because there is a risk of liability. There are four main sources of potential liability for these employers they are trying to avoid.
Under Wisconsin law, a communication is defamatory if it "tends to harm the reputation of another so as to lower him in the estimation of the community or deter third persons from associating or dealing with him."
While you may have been an exemplary employee with a glowing record, another former employee who quit or was let go may not have such a strong reputation. If that employee were to ask for a reference and a manager gave one that was not pleasant, they could have a defamation case against their employer.
2. Privacy implications of employee information
Wisconsin courts have held that a "conditional privilege" attaches to certain communication between employers and any individuals or entities having a common interest in the employee's conduct. However, in Zinda v. Louisiana Pacific Corp., the court analyzed the conditional privilege in the context of privacy rights.
The plaintiff brought a claim of "unreasonable publicity" against the company because information about the plaintiff's termination was circulated in a newsletter, which reached outside of the employer's premises. It was determined that while employees deserved to know about the termination, the newsletter was an unreasonable way to serve that common interest under "conditional privilege" and was a violation of the employee's privacy.
By not providing any information about current or former employees, employers are protecting themselves from violating said employees' privacy.
3. Retaliation claims
A former employee could have a claim for retaliation if an employer gives a negative reference after learning the former employee has filed a discrimination action or complained about illegal discrimination. This was the case in Robinson v. Shell Oil Co., where the plaintiff alleged his former employer gave a prospective employer a bad reference in retaliation for the plaintiff filing a complaint with the Equal Employment Opportunity Commission.
4. Negligent referral or duty to warn
While some states have implemented the doctrine of negligent referral or duty to warn, which holds an employer liable for providing an untrue reference or one that omits knowledge of an employee's criminal or dangerous propensities, it has not been adopted in Wisconsin in an employment context.
However, the Wisconsin Supreme Court decision in Miller v. Walmart Stores Inc. could potentially lead the court to uphold a negligent referral cause of action in the future. In that case, the court held that a negligent hiring or supervision claim is valid in Wisconsin, and a former employer would have a duty to accurately represent whether a former employee could pose a foreseeable risk of harming another employee if hired.
Therefore, it's not an unreasonable leap for the court to someday recognize the duty on the part of employers giving references or letter of recommendation to also take reasonable care not to misrepresent that former employee's character.
Employers want to minimize risk
For these reasons, many employers would rather play it safe and give out the same kind of reference for all employees. It minimizes their risk for having a lawsuit brought against them in the future.
While those rules put you in a bind while seeking new employment elsewhere, the employer has every right to institute them. Keeping in contact with former managers and co-workers is still important for professionals, as those colleagues may not be bound by reference rules if they are no longer associated with your shared former employer.