The Trouble With Online References

By Shay Hable

Feb. 3, 2010

Imagine that one of your managers receives a note via LinkedIn one day from a former colleague. The manager knows that Joe White has left your organization, but isn’t quite clear on the details, since the company’s announcement merely noted his departure without explaining it. The manager knows that Joe had once been quite a company asset, and he writes a dozen glowing lines about Joe’s contributions. He sends it back to Joe, feeling he has done a good deed.

It sounds innocent, and it could be. But it could also fuel a wrongful termination lawsuit. And it’s a good example of the collision that’s taking place in organizations every day. Social networking on sites like LinkedIn or Facebook isn’t going away. Employee lawsuits aren’t going away either. HR plays an important role in balancing these colliding forces and educating their managers in when a recommendation is safe—and when it’s not.

Whenever I speak on this subject, people sometimes tell me that lawyers have overblown the recommendation issue and that managers should be allowed to use common sense. I wholeheartedly agree: Lawyers usually overblow simple issues, and common sense should dictate managers’ behavior.

But also consider this: When people sue my clients’ companies, alleging sexual harassment, I search MySpace for the each of their names, and about half of the time I find these folks, posing provocatively and using sexually suggestive language, which in many cases undercuts the allegations made in their suits or impacts their credibility. Workers’ compensation claims investigators also check MySpace and accessible Facebook pages to see if supposedly injured employees are actually recuperating, or are out cavorting. Now imagine: Do you think your ex-employee’s lawyer isn’t trolling LinkedIn to see what your managers have to say about their client, and how their assessments square with your reasons for an employee’s termination?

According to a survey released in May 2009 by the Society for Human Resource Management, nearly 20 percent of employees use online professional networking sites such as LinkedIn and Plaxo, while 16 percent use online social networking sites such as Facebook, MySpace and Friendster. LinkedIn, in particular, functions as both a job-search site and a networking site where laid-off workers can reconnect with—and get leads from—former colleagues and business contacts, including through a Recommendations function. In other words, your employees are quite possibly being bombarded with requests to recommend former co-workers. And it takes just a few keystrokes.

An employee’s reference on a social networking site could prove to be problematic in a number of ways. Here’s some background on the overall problem with giving references.

The original worrisome legal claim in the reference arena was defamation, also called libel or slander. This claim arises where a former employee alleges that a manager made an untrue negative comment in a reference check and it harmed him, usually in that he was rejected for a subsequent job. While these claims are often unsuccessful because of the need to prove that the comment was untrue and harmful, employees still bring plenty of defamation claims against former employers. Indeed, employees sometimes argue defamation against an employer that did not even give a bad reference, but merely refused to give a good reference. This is why you see many company policies that permit only neutral references.

Building upon a 2006 Supreme Court case that expanded the scope of retaliation claims under Title VII of the Civil Rights Act, several courts have held that an employer’s negative reference could be the basis for a retaliation lawsuit. This line of cases worries employment lawyers, and HR departments, because it indicates that the risk of a retaliation lawsuit does not die once the employee walks out the door.

Any HR professional unfortunate enough to have lived through a discrimination lawsuit knows that the crux of a discrimination claim focuses on whether the employee can prove that the company’s reason for termination was a pretext, which, put bluntly, means that every discrimination plaintiff seeks to prove his employer is lying about the reason for the firing. As a result, savvy attorneys will search the Internet for any comment that is inconsistent with the company’s official message about the reason for the termination. For example: A plaintiff’s attorney representing Joe White, who was terminated for poor performance, will consider it pay dirt if she finds a LinkedIn recommendation by his manager stating that Joe White was the best employee he ever had.

An additional risk arises if the employee using a social networking site reveals specific confidential information that the company would not want in the marketplace or to be accessible by competitors. For example: An employer in the confidential development stages of a new product may have significant concerns if Jan Jones’ Facebook status read, “Finally finished the marketing proposal for our new sugar substitute. Now I can go to sleep!” While this fact pattern may come up less frequently, the consequences could be immediate and irreversible for the company.

There is no one right answer here. A company that has weathered one too many legal disputes may take the most cautious route, prohibiting managers from using a social networking tool to speak about work—at all, period. For some employers, especially those with high turnover and legions of former employees with axes to grind, this may be a perfectly reasonable business judgment.

But some companies wish to find a social networking and reference policy that allows managers to help their former employees without putting the company at undue risk of a legal claim. That may be a reasonable judgment too. If your company struggles with this balance, consider these points:

Ensure solid policies in the first place. Several clients have asked me for a “social networking policy,” but I usually feel that anything we draft on this topic will be out of date in six months. Instead, I ask them to review their existing policies on confidential information, references and Internet usage to ensure that they cover evolving technology. As you look at your practices, ask yourself: Have you made it clear that employees should not be speaking about company strategy or detailing their work projects without your approval? Do managers understand whether they are allowed to provide a reference for a former employee and, if not, what do they do if asked? The same policies will apply to social networking situations.
Protect proprietary information at all costs. Start with a policy on confidential information. Describe the types of information you expect employees to keep confidential and stress that this policy applies to their use of the company’s technology. When you find employees Twittering about internal company strife, badmouthing the company’s business choices on a blog, or recommending as brilliant the underperforming CFO you just fired, they may have violated your policy, even if the behavior did not rise to the level of violating the trade-secret law. They can, and often should, be terminated for this behavior.
Control the message. A common reference policy dictates that all reference requests should be directed to HR, and HR will provide only dates of employment, position title and salary. This is certainly the least legally risky policy, and one I endorse unless a company fully understands and is willing to absorb a bit of legal risk in the name of helping former employees. If, however, you would like to allow managers more leniency to provide references, education is key. They need to understand that those references could possibly show up again in a lawsuit and they would need to be prepared to defend their words as accurate and consistent with the company’s position.
Distinguish between company references and personal ones. For the most part, a company should not have the time or interest in policing its employees’ off-duty conduct, and some state laws even make this illegal. For this reason, many companies will clarify that managers may give a purely personal reference if they choose, but they should not speak as a company representative in order to avoid inconsistent messages and potential defamation claims. This solution may strike the best balance between a company’s legal risk and a manager’s desire to “just be human.” HR can provide helpful examples to assist managers in understanding this distinction.
For example, this reference may be problematic if inconsistent with other company documentation: “Joe has worked for me for 10 years. Most recently, we worked on the strategic pricing project and Joe came up with the BuyLo initiative that increased revenue by 10 percent. Joe was a favorite with internal clients.”
This reference, however, is probably beyond the purview of the company’s HR and legal departments and would not be a problem: “I have known Joe for 10 years. I have observed that he is energetic, enthusiastic and innovative.”
The social networking recommendation issue, like most others confronting HR professionals, is all about balancing risk. Many HR departments legitimately decide that allowing managers to provide any reference is not worth the exposure. Others are willing to absorb a bit of risk. Ensure that your leaders are well educated on how their words matter to make this common-sense decision.

Schedule, engage, and pay your staff in one system with