Edition: U.S. / Global

Executive Life; When a Reference Is a Tool for Snooping

Published: October 19, 2003

HUMAN resources managers have been drilled for years by their lawyers to provide only the most limited job references on former employees. Now they have even more reason to be cautious.

Growing numbers of job applicants are hiring companies to find out what their former employers are saying about them, employment lawyers say. Job seekers can use information from these companies to confront former employers or even to bolster legal action they may take after being let go.

Though the exact number of companies offering reference checking services is unknown, a Google search with the phrase ''reference check'' turned up at least 10 companies willing to call job seekers' former employers and document what they hear about their clients. Companies like References-etc., Badreferences .com and Allison & Taylor Inc. will provide a reference check report for a fee between $50 and $90.

''There are enough companies out there that employers have to be very careful,'' said Scott J. Witlin, a partner in the Los Angeles office of the law firm Proskauer Rose, who advises companies on employment matters.

Guy Fowler, vice president for operations at Documented Reference Check, a California-based company that also does business under the name Badreferences.com and Status Reports, said his company had produced reports that had been used in many cases against employers. ''But we are not necessarily hired in connection with a lawsuit,'' Mr. Fowler said. ''Sometimes people just want to know how to interview better. It's like interviewing with X-ray vision. You know what a potential employer knows.''

The company uses only licensed court reporters to place reference checking phone calls, Mr. Fowler said. ''This helps us when we get to court.''

The reference checking companies are adding to the difficulty that employers have long had in providing references on former employees. A company that gives a glowing reference on an employee fired with cause could soon be defending a wrongful termination case. A company that fails to mention negative information about a former employee with known dangerous tendencies could be sued by a future employer for failing to disclose the damaging information.

Many companies adopt a ''name, rank and serial number'' policy, merely confirming facts like dates of employment and positions held. ''If you're looking to sue, you can find something that you can take issue with in any reference, and that is why employers should be wary about giving references,'' Mr. Witlin said. ''The fact that these companies are out there designed to foment lawsuits makes it all the more imperative that employers take this position.''

But other experts see it differently. Wendy Bliss, a lawyer and human resources consultant, says companies ''making the extra effort to check references on prospective employees to avoid negligent hiring, bad publicity, workplace violence and the whole range of things that may happen when you don't know whom you're hiring'' should share information ''when they are on the other side of the equation.''

Still, she said, ''They should be doing that safely.''

According to Ms. Bliss, the author of ''Legal, Effective References: How to Give and Get Them,'' there is plenty of information a former employer can and should legally provide, like whether job performance work behavior and habits were adequate, or how well a candidate functioned as part of a work team.

''What employers and supervisors should keep in mind is that they'll be on pretty solid ground if the information is truthful, job-related and supported by documentation,'' she said.

A company should have a written policy telling employees the type of information that will be given in references, Ms. Bliss said. ''There should also be a procedure that says who in an organization can give information about whom,'' she said. ''And employers shouldn't give out any information unless they receive a signed consent and release form, including a waiver of liability, from the employee.''

Some human resources executives say that despite the increased use of reference checking companies, an emphasis on business ethics could lead to more openness in references. ''There is almost an ethical responsibility to be forthright without damaging someone's career,'' said Marna Hayden, senior vice president for human resources at Nazareth National Bank in Bethlehem, Pa.

Ms. Hayden said that if an employee had been let go because of something serious, like bank fraud, she would be obligated to inform a potential future employer. On the other hand, she said, if a person left the company because of a lack of certain skills but excelled at others, she would feel comfortable sharing that information as long as the former employee agreed to the disclosure. ''We try to be very careful not to damage anyone in the process, whether it's the company seeking to employ the former employee or the employee.''

Even when companies have policies limiting the information that managers can reveal, people tend to talk, particularly when the former employee was a good performer, according to executive recruiters. ''We ask each candidate to give names of three previous supervisors or people they've reported to,'' said Lynne Sebastian, a recruiter with Cornell Global in Wilton, Conn. ''I find people are very open. We get a pretty complete picture of most of our candidates.''

Kathy Albarado, president of H.R. Concepts, a human resources consulting firm in Herndon, Va., agreed. ''An employer won't withhold info on a star employee,'' she said. ''What I've seen people do to bend the rules is say 'I can't provide a professional reference, but I will provide a personal one.'''

Ms. Hayden of Nazareth Bank, who has worked in human resources for 33 years, said it was critical for a former employee's managers to let the human resources managers provide references. ''Mainly, we just stick to the facts, but it's not our job to keep anyone from getting a job,'' she said. ''Ironically, few people ask us for more information. I've had some people who were let go under difficult circumstances where I was dreading the call. And lo and behold, the call never came.''

Photo: Wendy Bliss, a lawyer and consultant, says there is plenty of information that a company can and should provide about former workers. (Photo by Tom Kimmell for The New York Times)