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Another Painful Lesson for Employers Responding to Background Checks Concerning Former Employees

April 2014

By: James B. Sherman, Esq.

To give or not to give: that is the question - at least when it comes to whether or how to respond to another employer's questions about one of your former employees as part of its background check. Our readers may recall our previous article about a case where a positiveemployment reference given to assist a discharged employee in finding a new job, was later used by the employee to support his age discrimination lawsuit challenging his termination. See When it comes to Employment References: Employers Should Think Twice Before Playing "Minnesota Nice" (April 2013). More recently, in Minke v. City of Minneapolis the Minnesota Supreme Court allowed a trial to proceed in a case involving an employee's challenge to a negative reference given by his former employer. As these cases and others like them illustrate, providing references on former employees as part of another employer's background check, whether positive or negative, can be a risky proposition.

In the recent case, the plaintiff resigned from the Minneapolis police academy and applied for work at the Mounds View Police Department. As part of the application process the employee authorized Mounds View, in writing, to contact his supervising sergeant with the Minneapolis Police Department for background information. Apparently the employee felt his former supervisor had less than flattering things to say about him because after he failed to get the job he sued the City of Minneapolis for defamation and tortious interference. The suit claimed the employee was not hired because his former supervisor in Minneapolis made defamatory statements to Mounds View during its background check, including "attacks on [his] honesty, integrity, character, work ethic, and performance." Despite the fact that the plaintiff had expressly authorized his former employer, in writing, to provide his prospective employer with a review of his performance as part of its background check the court allowed the defamation claim to proceed to trial.

In its decision, the Minnesota Supreme Court noted that although "[i]t is certainly in the public interest that [information about a former employee] be readily available to prospective employers," it is also "important to protect the job seeker from malicious undercutting by a former employer." The Court noted that Minnesota Statutes § 181.967 (a shield statute heavily supported by business groups) was an attempt by the legislature to balance these competing interests by detailing information employers can provide to prospective employers or employment agencies about current or former employees, while describing in great detail how that information must be disclosed in order to shield employers from claims for defamation.

Neither the shield statute, nor the fact that the plaintiff in this particular case had given his written authorization for his former employer and supervisor to respond to a background check, proved fatal to the ensuing defamation lawsuit. This new decision provides yet another lesson on why, absent some legal obligation to disclose, employers are well served to remain tight lipped when asked for references or background information about former employees.


For experienced guidance in dealing with inquiring employers and crafting policies and procedures dealing with employment references that do not provide a former employee with information to further any potential cause of action against you, contact: James B. Sherman at (952) 746-1700, or email jasherman@wesselssherman.com or chstaul@wesselssherman.com.