Many employers and workers alike have been told at one time or another that negative references could be considered defamatory and result in legal action. Generally speaking, Canadian employers are protected from such action to the extent that any such negative reference is made in good faith. This is different than the reality in the United States, where suing for negative references is appropriate for a defamation case.
That said, there are some circumstances where negative references could give rise to a dispute. Employers who may be vulnerable to lawsuits related to negative references despite these general protections include:
- Companies with a policy to not provide references at all who then breach the policy: Despite the fact that Canadian employers are by and large protected from being sued due to references, many still have concerns about backlash for a negative comment. One common way companies respond to this concern is by having a policy wherein they only respond to reference checks with a simple confirmation of how long the employee was employed. If a company has this policy but later provides a negative reference for an employee in breach of that policy, a claim against the employer in breach of contract may be possible.
- Employers who have made a positive reference agreement as part of a severance package: It is not uncommon for employees who are let go after some difficulties between themselves and the employer to negotiate a positive reference requirement into their severance package. This would also open an employer up to breach of contract if the employer fails to provide that positive reference.
- Employers who are guilty of discrimination, sexual harassment or wrongful termination: A refusal to provide a reference or the provision of a negative reference could give rise to additional injury to dignity, aggravated or punitive damages in connection with an existing cause of action related to the employer’s behaviour and actions.
It is important for both employers and workers to understand the scenarios in which providing a reference to a departing employee could lead to issues. Situations where this could come into play are typically those involving a breach of contract or another issue related to wrongful termination.
Employers who are concerned about their legal vulnerability related to references, or individuals who are concerned about a negative reference being provided after the termination of their employment, could benefit from the services of an experienced British Columbia employment lawyer.