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How to avoid a potential lawsuit when giving references
Make your employees aware of your policy.
As always, an ounce of prevention is worth a pound of cure. Make sure that you have a standard policy in place for giving references.
That way, you can minimize the chances that an employee will even be tempted to bring a suit against you. Make sure that all relevant personnel, such as hr, are aware of the reference policy from the beginning of their employment with your firm.