[header] How to avoid a potential lawsuit when giving references [title] Make your employees aware of your policy. [step] 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. [substeps] Make sure that all relevant personnel, such as hr, are aware of the reference policy from the beginning of their employment with your firm.