What can a previous employer say in a background check
Former employers often feel very limited when responding to reference and past employment inquiries from prospective employers. Previous employers are understandably concerned about potential litigation arising out of information provided regarding a previous employers work history.
Telling the Truth
We know of no laws limiting factual answers from previous employers. Indeed, a number of states have laws protecting employers from such lawsuits. Underlying all these laws is the requirement for absolute truth on the part of previous employers. In fact, previous employers may incur liability by failing to disclose some facts about a previous employee when such failure to disclose results in harm to those customers or employees of the new employer. While a number of personal topics such as sexual orientation, age, race, marital status or parental status are normally off limits as they may not be used as factors in a hiring decision. Fortunately, hardly anyone cares about such personal matters. The main thing past employers must do is tell the (well documented) truth, as that is their best protection.
Defamation Vs. Negligent Referral
An article By LINNEA B. MCCORD, JD, MBA, https://gbr.pepperdine.edu/2010/08/defamation-vs-negligent-referral/ illustrates very well how a policy of giving only basic employee references may lead to liability. An egregious example is the case of Allstate insurance failing to adequately warn a subsequent employer (Fireman’s Fund Insurance) of the behavior of a previous employee threatening behavior.