Effective January 1, 2019, employers are protected by an expanded privilege when giving an employment reference during the background check process. The privilege protects employers from defamation claims when advising a prospective employer that the applicant was the subject of a credible sexual harassment claim.
The claim must be “without malice” and based on credible evidence in order to be covered by the privilege.
Employers are currently protected from non-malicious references regarding the job performance or qualifications of an applicant for employment during background checks. Existing law also authorizes an employer to answer whether or not the employer would rehire an employee. However, many employers don’t use their privilege to speak out against bad actors in their workplace. The primary concerns in opting not to give a substantive reference is fear of a defamation lawsuit or tortious interference with a business opportunity claim under Labor Code section 1050. In failing to give a truthful reference, we have created a system where alleged harassers (and other terminated employees) get to move on and become someone else’s (client’s) problem.
Now, employers who want to ensure alleged harassers don’t continue their bad behavior at their next employer can feel more secure in speaking up about employee performance and policy violations when the next reference check call comes in.