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When a San Diego pet store worker applied for a new job, the prospective employer phoned her boss for a reference. But her boss apparently didn’t like her. He told the prospective employer that she was an alcoholic, had illegitimate children and dated a drug pusher. What her boss didn’t know was that the call really came from a California-based company called Documented Reference Check, which is hired by job-seekers to pose as a prospective employer in order to find out what bosses are really saying about them. Using the information obtained by DRC, the woman sued the pet store owner for defamation. While that employer got scorched for loose lips, others land in trouble for lockjaw. Cook Inc., an Indiana-based company, gave employee Walter Kevin Scott a good reference. It failed to say that Scott was a convicted identity thief. On the basis of the reference, the state Public Employees Retirement Fund hired Scott as its chief benefits officer — a position that gave him access to personal information on more than 200,000 working and retired public employees, according to a report released by Indiana Gov. Frank O’Bannon. As these two cases illustrate, employment references have become fraught with legal complications. Job-seekers are finding it increasingly difficult to get employers to give references, even when they have good performance records. Prospective employers are having a harder time obtaining full reference information, which is considered critical in effective recruiting and hiring. And current and past employers are walking a legal tightrope when asked for a reference. With the economy struggling and scads of laid-off workers looking for jobs, legal concerns over references have become so common that employment lawyers in South Florida have started holding seminars for human resource managers on what they can and can’t say about their current and former workers. There has been a “great rise” in employee lawsuits over references,” says Ron Rosengarten, an employment lawyer and shareholder in Greenberg Traurig’s Miami office who represents employers. As a result, “employers are skittish about giving any references,” he says. “There is little upside to saying anything but name, rank and serial number.” Steven Parrish, an employment lawyer and associate at Broad and Cassel in West Palm Beach, Fla., who also represents employers, agrees. “A smart employer who is aware of these issues is not going to give subjective references,” he says. “The goal is not to get sued.” IMMUNITY, SORT OF Florida Statute 768.0295, enacted in 1991, gives employers immunity from liability in providing references, unless the statements are false or violate the person’s civil rights. Immunity is granted, according to the statute, “unless it’s shown by clear and convincing evidence that the information disclosed was knowingly false or violated any civil rights of the former or current employee protected under the Florida Civil Rights Act.” That statute makes it difficult to successfully sue over a negative reference, says Neil Chonin, a Coral Gables, Fla., employment lawyer who represents plaintiffs. “It’s a difficult tort,” he says. “The employee says, ‘I have a feeling I was badmouthed.’ Well you can’t litigate over a feeling. And usually the prospective employer doesn’t want to get involved.” But the law’s protection is not absolute, and the last thing an employer wants is to be in the middle of a lawsuit, Parrish says. Thus, South Florida employment lawyers advise companies to say little and, above all, to have a consistent policy for all employees and former employees. At the same time, Rosengarten tells human resource clients to develop an informal but strictly confidential network in their particular industry to allow free sharing of sensitive information about employees. One piece of advice he gives to his banking industry clients: Never say that an employee engaged in theft. Unless you can prove it, that opens you and your company up to a serious lawsuit. Because it’s become increasingly difficult to get employers to provide full reference information orally, plaintiffs’ lawyers are strongly encouraging employees to get a letter of reference from an employer before leaving a job. While lawsuits filed in South Florida over bad references are uncommon, the bad references often are a crucial element in civil rights discrimination actions. That’s because damages are higher when plaintiffs who claim they were fired due to discrimination are unable to find new jobs because their former employer is still badmouthing them. Many Florida companies have adopted strict policies on giving out references, usually requiring reference information to come through the human resources department. Fort Lauderdale-based AutoNation, for example, will only confirm someone’s employment and dates of employment, says spokesman Marc Cannon. The law firm White & Case will provide only a title, date of hire and date of departure. “No salary, just name, rank and serial number,” says Candy Grout, administrator in the firm’s Miami office. New York-based American Lawyer Media, which owns the Miami Daily Business Review, Florida Lawyer and law.com, has a policy of providing a full reference through its human resources department only if the employee or former employee seeking the reference provides written authorization. Otherwise, the company only will confirm basic information, such as that the person was an employee, position, salary and dates of employment. Some companies have adopted a policy of not giving any references — good or bad. That’s the case with the Denver-based alternative newsweekly chain New Times, which publishes newspapers in both Miami and Fort Lauderdale. The company announced the policy in 1999 after a staffer in Texas allegedly disclosed negative information about a former employee to a would-be employer. Steve Suskin, legal counsel at New Times, says his company’s policy of only confirming employment and salary is “sort of a trend in the industry.” As a result of that policy, one well-regarded former New Times writer lost a job opportunity after the publishing company refused to provide a reference, according to the writer, who did not want to be identified. That illustrates the larger problem, Rosengarten says. “The law keeps good employees from getting good references, unfortunately,” he says. He believes companies should be free to provide full disclosure in references. To try to share information without opening themselves to a lawsuit, some human resource directors and managers have devised code words to reveal whether employees left on good terms or were good performers. One popular formulation of this question: “Is he or she eligible for rehire?” “That’s become a standard question for the well-trained HR person or someone at my level,” says David Schull, senior vice president at the Coral Gables public relations firm Thorp & Co. When he’s asked that question by a prospective employer about a current or former employee, he will answer yes or no, and also provide the person’s title and dates of employment. “But we won’t elaborate,” he says. Another Miami hiring manager, who did not want to be identified, says he recently called the former employers of two job candidates seeking a reference. In one case, he was told, “Read between the lines.” In the second cases, he was told, “Draw your own conclusions.” Employment defense attorneys say these responses are reasonably safe legally. But the Miami hiring manager was left with a dilemma. “So who should I hire, Read Between the Lines or Draw Your Own Conclusions?” he quips. Rosenberg says that hiring managers almost have to engage in a mutually agreed upon game of cloak and dagger to exchange information. It’s like, “I’ll count to 10 and you hang up the phone if he is a good employee,” he says, comparing it to an interview Washington Post reporter Carl Bernstein had with a source while reporting on Watergate. But these ploys can be risky. “The employee may have a friend in either place — the new job or the old job,” Parrish warns. “He or she will ask, ‘Why didn’t I get the job?’ and the friend will say, �You got a bad reference.’” Some employers, however, seem not to have gotten the message yet about the need to be cautious. In a highly unusual move, the San Francisco-based law firm Pillsbury Winthrop issued a news release announcing that mergers and acquisitions attorney Frode Jensen’s departure was due to sexual harassment complaints against him as well as lack of productivity. Early in October, Jensen sued Pillsbury for $45 million. According to the Connecticut Law Tribune, Jensen said he had to withdraw from his new job, a partnership at Latham and Watkins, where he was to be paid at least $1.1 million a year, after Pillsbury’s surprising news release. The attorney alleges, among other claims, that Pillsbury engaged in defamation, interference with a contract, interference with business relations and injurious falsehood. Other employers can be surprisingly loquacious as well. Schull says that when he calls for a reference on a potential hire, 80 percent of the time the current or former employer will answer all his questions, including his favorite query, “Was the employee a superstar?” Yet when the tables are turned, he refuses to answer such open-ended questions as, “Please rate the person on a scale of 1 to 10″ in a particular category. Employers’ careless comments led to the establishment of the Diamond Bar, Calif.-based Documented Reference Check 20 years ago. The founder was a professional recruiter who felt terrible when she saw job-seekers get trashed by former employers, yet was barred from telling the job-seekers what their former bosses were saying about them. “They would go from job interview to job interview, never getting the job,” says chief financial officer Henry Ashe. “The term for them was ‘the walking dead.’” DRC experienced rapid growth until recently. Now, with more people looking for work in the sluggish economy, business is picking up again. “We have so much work we have to give our overflow to private detectives,” Ashe says. For $87.95, you can hire the company to discreetly check on what your former boss is saying about you. If the boss is denigrating you, DRC, for an extra fee, will send a cease and desist letter to the employer. It also will send its staffers to appear in court as expert witnesses in lawsuits filed by people who received a negative reference. Rosengarten says that what DRC does is perfectly legal in Florida — though it can’t record a phone conversation without the consent of the other party. DRC, which handles about 4,000 cases a month, finds that the current or former employer says something negative about the job-seeker in about a third of the cases it investigates, Ashe says. And the badmouthing quotient is on the rise, he adds. Ashe says his company’s clients have never lost a lawsuit, and generally don’t have to go to court to win a settlement once the former employer finds out it’s been caught red-handed. The biggest verdict one of his company’s clients won in a defamation suit over a bad reference was $1.5 million. DRC recently was hired by a group of former Internal Revenue Service employees who had become whistleblowers and complained about problems in IRS procedures. One of the employees who hired DRC says that his former IRS supervisor viciously defamed him in her conversation with the DRC investigator. “My former supervisor unwittingly boasted to your interviewer that she knew it was illegal to defame me,” according to a statement attributed to Richard Green, identified as a former IRS employee, which is posted on DRC’s Internet site. “You caught the Internal Revenue Service red-handed.” Which employers are the worst offenders in trashing ex-employees? Ashe says school systems top the list, followed by health care and engineering companies. The worst states for bad references? New York, California and Texas. But Florida is consistently in the Top 10.

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