• California Appeals Court Affirms Dismissal of Case Against Former Employer Who Gave Defamatory and Inaccurate Job Reference
  • December 31, 2003 | Author: Helene J. Wasserman
  • Law Firm: Ford & Harrison LLP - Los Angeles Office
  • On December 5, 2003, the California Court of Appeals affirmed the dismissal of a case against the plaintiff's former employer who gave the plaintiff a defamatory and inaccurate job reference. Noel v. River Hills Wilsons, Inc. (12/5/03.)

    Brandon Noel applied for employment with GTE in March 2000. As part of the application process, Noel filled out a background questionnaire that required former employment information and full disclosure of any criminal convictions. Noel was hired on a contingent basis, pending the results of the background investigation.

    In response to the application's question regarding criminal background, Noel indicated that he had been convicted of a felony that he described as "aiding and abeting [sic]/not fully involved" and that he received "parole/probation to youth authority." GTE retained ChoicePoint to conduct a full background investigation of Noel. As part of that investigation, ChoicePoint learned that Noel had been convicted of carjacking, attempted robbery, exhibiting a weapon, burglary, and robbery and that Noel was released on parole. While the information provided by Noel regarding his criminal history was deemed inaccurate, it was not established that this was the basis for Noel's ultimate termination.

    ChoicePoint also contacted Noel's former employers, including defendant Wilsons. A manager at Wilsons, Santillan, advised that Noel left Wilsons' employ because of "loss prevention issues" and that Noel's rehire status was "unfavorable." However, Santillan was mistaken -- Noel had no "loss prevention issues" with Wilsons. Based on the results of ChoicePoint's investigation, GTE terminated Noel's contingent employment.

    Noel sued Wilsons and Santillan for defamation, among other claims. Noel claimed that the Santillan's inaccurate comments caused him to lose his job with GTE and caused emotional distress. In dismissing the case, the trial court held that the Santillan's comments, although inaccurate, were protected by the common-interest privilege set forth in California Civil Code Section 47 (c).

    The California Appeals Court affirmed. The court explained that the state law's "common-interest privilege" extends a conditional privilege against defamatory statements that are "made without malice on subjects of mutual interest." In 1994, the law was amended to expressly state that the privilege extends to communications made by and for employers to prospective employers. Thus, if such a communication is made without malice, an employer cannot be held liable for inaccurate information provided by a former employer when responding to inquiries of a prospective employer.

    In this case, the court concluded that no reasonable jury could find that Santillan's statements were motivated by malice. Instead, the evidence showed that Santillan made an unintentional error; he was expecting an inquiry regarding a different former employee and provided the information regarding that employee in response to the inquiry regarding Noel.

    Given the prevalence of employment-related litigation in California, many employers have historically adopted policies of only providing responses such as "no comment" or "name, rank and serial number" when receiving job-related inquiries regarding former employees. The Noel court expressed concern that while such policies may protect employers the protection comes at "the expense of communication in the job market." The court interpreted the state law privilege as protecting employers against defamation suits under these circumstances where the information is "based upon credible evidence." That language is interpreted as excluding information based upon mere rumor but not excluding information provided negligently. In this case, there was no evidence that Santillan provided the information based on gossip or rumor; it was simply a mistake.

    While this case provides some protection for employers and their managers when asked to provide reference information regarding former employees, the protection is limited to information provided "based on credible evidence." The best way for an employer to ensure that the standard is met, and that the only "mistakes" that are made are solely due to negligence rather than some hidden malice, or rumor or gossip, is to require that all reference information be provided solely through a human resource department and not through individual managers. Having detailed reference policies in effect and communicating those policies to all managers may not prevent lawsuits from being filed, but could very well insulate employers and managers from liability in the event an action is filed.