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In New Jersey, like most states, there is no affirmative duty to respond to a request by a prospective employer for a reference. Awareness of potential liability has long led most attorneys to counsel clients to keep references for former employees to “name, rank and serial number” by limiting reference responses to one or two persons in the company who would simply verify employment dates and position held. For those laggards who haven’t yet gotten the message, the Appellate Division’s decision in Singer v. Beach Trading Co., 379 N.J. Super. 63 (July 19, 2005), sounds much like mom’s admonition against gossip: “if you don’t have something nice to say, don’t say anything at all.” In Singer, Judge Jose Fuentes, writing for the unanimous appellate panel, ruled that an employer could be held liable for negligent misrepresentation of a former employee’s work history under certain defined circumstances: (1) the inquiring party clearly identifies the nature of the inquiry; (2) the employer voluntarily decides to respond to the inquiry and thereafter unreasonably provides false or inaccurate information; (3) the person providing the inaccurate information is acting within the scope of his/her employment; (4) the recipient of the incorrect information relies on its accuracy to support an adverse employment action against the plaintiff; and (5) the plaintiff suffers quantifiable damages proximately caused by the negligent misrepresentation. Citing the Restatement (Second) of Torts at � 552 (1977), (originally intended to apply to professionals who rely on misinformation to their detriment), the court said that once an employer voluntarily decides to provide a reference, they bring upon themselves a duty to “exercise reasonable care or competence” in the process, then triggering the other factors. Unlike the typical negligent misrepresentation case, where the recipient of the information sues based upon reliance on negligently provided misinformation, the court said that the protections of the tort under � 552 apply as well to plaintiffs who are damaged by the misinformation. Previously, negligent misrepresentation causes of action involving references had been permitted in other states where misinformation concerning the violent propensities of employees results in injury to a new employer or third persons. See, e.g. Randi W. v. Muroc Joint Unified Sch. Dist., 929 P.2d 582 (Cal. 1997). In imposing liability in the employment context, the court extrapolated from two New Jersey federal cases a similar duty; one case involved a nuclear plant operator (Pub. Serv. Enter. Group, Inc. v. Philadelphia Elec. Co., 722 F. Supp. 184), and another a company that measured shipping tonnage under maritime law (Somarelf v. American Bur. of Shipping, 704 F. Supp. 59). While Singer is the first such decision by a New Jersey court, it makes intuitive sense and it begs the question as to why an employer would respond to an inquiry at all, let alone provide false or inaccurate information. The Singer standard may not be an easy one to surmount, but it is not impossible. Practically speaking, providing limited reference information as a matter of policy provides the best of all worlds for the employer. The employer cannot get into trouble, an employee can’t come to expect that he or she will have laudatory comments or embarrassing details revealed, and the prospective employer cannot allege that they relied on misleading favorable information. That’s why these types of references are often built into separation agreements. The policy works in the real world in most cases. However, many employers will, despite such policies, go out of their way to provide a positive specific reference for employees they like but who, for whatever reason, needed to move to a different employment environment. One would think that in the case of an employee whose tenure was notorious, the prudent move would be to say nothing, or stick to the “name, rank and serial number” minimum. But what happens when there is a pervasive feeling in the office that an employee was trouble or that the employee’s idea of her role was overblown? And what happens when a subsequent employer doesn’t make inquiry through the usual channels of the human resources department or top executive? The facts developed in the Singer case appear to be a textbook example of how to be on guard for surreptitious reference checks and how not to respond to requests for references. Marsha Singer worked in a family owned retail electronics chain in an unspecified management position and was soon promoted to vice president. At some point, Singer was asked to take over the customer service department without any change in title or salary. She actually sat in the department at a desk similar to those used by other customer service representatives through her employment. A few months later, she accepted a new position with an employer whose employment commitment letter promised a 60-day severance if she was terminated within the first year. Conflicts with the new employer ensued within a few days of Singer beginning the job. The new employer then engaged in what the court called “a needless subterfuge, misrepresenting his identity and the true nature of his call,” when he contacted several representatives of the previous employer’s customer service department seeking information on Singer. All of those persons, including the current customer service supervisor, identified Singer as a former customer service representative without higher title or supervisory responsibilities. Based upon these calls, the new employer terminated Singer for making misrepresentations on her resume, claiming the misrepresentations negated any obligation to pay $13,000 in severance pay. Singer sued and the trial judge dismissed her complaint. The Appellate Division ruled that summary judgment could not issue because the new employer called seeking to verify references and the head of the customer service department gave false information as to plaintiff’s former position. But the court made clear that a host of factual issues remained regarding the other Singer factors — such as whether the employees acted within the scope of their employment, or whether the new employer actually relied on the misrepresentations or intended to fire Singer even before he called to inquire and the trial court should make these factual findings. The court also rejected plaintiff’s claim that the incorrect account of Singer’s employment history constituted negligence per se, noting that there was a factual dispute as to whether the other employees knew or should have known of plaintiff’s actual title. If the facts set forth in Singer tell any cautionary tale, it is that an employer who takes the reins of the entire reference process by fiat and makes clear among supervisors and staff employees that there is only one source for information about a former employee — and then that source is careful and limited — trouble will not likely follow. It is a tale worth heeding. Bruce S. Rosen is a director and Amy C. Grossman is of counsel at McCusker, Anselmi, Rosen, Carvelli & Walsh of Chatham, where they practice a wide range of litigation, including employment litigation.

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