Another situation that would warrant the release of this information is if the incumbent's position could jeopardize the financial security of the company or the public image of the company. Obtaining criminal conviction records does not necessarily mean that this information can be used in making the hiring decision. Some states have laws prohibiting discrimination against people who have a criminal record. It's advisable to check with the state Department of Labor before securing the criminal record information. When verifying employment with a former employer, it is likely that the former employer only is willing to provide the dates of employment and the position of the employee.
Litigation resulting from negative reference checks is on the rise.
A defamation suit could result if a former employer gives out false and negative information about an applicant. Defamation is defined as the unprivileged publication of a false statement tending to harm the reputation of another person. Although saying nothing may appear to protect the company from liability, this is not always the case. Employers may be sued by other employers if they fail to disclose negative information about an applicant that could adversely impact the inquiring organization. For example, ifan individual applies for a position with a bank and the bank calls the previous employer for a reference, but the previous employer does not tell the bank that the individual was terminated for stealing money.