Available Upon Request? Qualified Immunity for Employer References

The standard advice for employers faced with this dilemma historically has been to say very little of substance about former employees in order to minimize the risk of potential liability. For better or for worse, that approach also allows the former employee considerable flexibility in characterizing the reasons for his or her job movement. Following that approach, the vast majority of law firms have adopted neutral reference, or 'name, rank, and serial number' policies. An employer response under such a policy provides a confirmation that the employee worked at the firm for a specific time period in specific capacities, but declines to comment on the quality of work by the prospective hire, his or her job performance, or the circumstances surrounding his or her departure. This 'say nothing' regime, while avoiding liability for firms, has the negative consequence of restricting the flow of information in the employment market. Candid information about an employee's performance and qualifications, both positive and negative, is unavailable to a prospective employer. Thus, excellent candidates may lose the benefit of what would otherwise be strongly positive references, while the limitations of poor candidates may not be fully conveyed to the market.

The artificial constraint of information available to the labor market creates more than merely theoretical economic inefficiencies for law firms and those they employ. Many firms incur high transaction costs to recruit and hire lateral talent, but the long-term success rates of such hires can be relatively low. More transparency in the reference process could help firms do a better job of selecting candidates who are a good fit with the positions they are attempting to fill. At the same time, better fit is more likely to lead to stability and long-term success for the individual candidate. Particularly within close legal communities where qualified staff and attorneys move among a relatively small number of firms, each firm has an interest in hiring those who best fit its culture and profile. The open availability of hiring references serves this interest, making hiring in a given legal market more efficient.