Advise management and personnel entrusted with the authority to fire to keep their lips sealed whenever possible. Avoid giving negative references to prospective employers. Anxious to avoid the high cost and aggravation of defamation suits, many companies are now confirming only an individual's former employment, the dates of employment, and the last salary grade and position held. Although some states have ruled that employers have a qualified privilege when discussing an ex-employee's job performance with a prospective employer, a qualified privilege can be lost if abused. For example, the company can be liable if an executive knowingly makes false defamatory comments about a former employee due either to reckless disregard for the truth, ill will, or spite.
Many states prohibit the dissemin- ation of confidential medical information as well.
Avoid criticizing an individual in front of others, particularly at the exit or firing interview. Defamation occurs not only by the dissemination of information to prospective employers, but also on-site within your company. For example, an employee working for a large automobile manufacturer was suspected of theft. Hundreds of workers observed him being forcibly searched and interrogated when leaving the premises. Understand that the rights of terminated workers are expanding rapidly throughout the U.S., and a defamation action against your company may be brought if a person's business reputation is impugned in and of itself by the firing.