A Personnel Nightmare
In our last issue, we talked about problems related to giving and getting references on "new-hires".
We told of a case study involving a teller who had gone from bank to bank stealing money. The teller had neither admitted to nor been convicted of a crime. Therefore, none of the institutions who hired (and then fired) him believed they could pass along information that would have ended his spree.
There have been a number of laws passed in recent years that protect employees from former employers looking for revenge.
In many states, for example, employees have the right to see the actual references which a company may have gathered on them. And, in cases where the individual has been slandered or the records falsified, lawsuits have resulted.
Many employers have felt the chilling affects this sort of legislation has had on exchanging reference information, and many have misinterpreted its meaning.
No laws, no regulations nor any prohibitions exist, nor have been erected, to protect corrupt former employees from the truth.
There are very simple and straightforward ways to deal with the problem and these start with the way you design your application. (Best done with an attorney's advice).
THE APPLICATION should contain a section in which the applicant gives the employer permission to request information on his or her background.
This section should allow the employer to request transcripts from schools attended, references from former employers and, if appropriate, to investigate credit information, criminal and fingerprint records.
There should also be a space for the applicant to sign, giving the employer explicit permission to check these sources.
And the employer should follow up with this permission in hand and carefully check out every prospective new hire before making an offer.
The only caution here is not to check sources other than the ones for which you have been given permission. (We purposely omitted personal references in the list above because of their dubious value, so don't check them if you haven't asked the candidate's permission to do so).
The application should also contain a section in which the applicant agrees that if the application:
- provides false or misleading information, or
- shows the omission of relevant facts,
that either of these reasons can lead to denial of employment or the employee's termination.
These simple steps will enable you to safely and completely check all reasonable sources of information about the people you hire.
EX-EMPLOYEES: But what about the people who leave your employ? What can you safely tell a prospective new employer about a former employee?
Well, you can always just tell the truth.
Telling the truth about the teller in our case study would have protected the next two institutions in the string which suffered losses because they were fed misinformation from the original bank experiencing the loss.
The first bank could not have said the employee stole from it because the case was neither proven nor was the theft admitted in the presence of witnesses. And the applicant had been truthful in answering the question, "Have you ever been convicted of a crime?" He had not been, at least at that point in time.
On the other hand, the teller was $13,000 "short" when he was discharged and, surely, the reason for the dismissal was that the teller had "failed to follow the bank's procedures" or he was "terminated for poor performance".
In either event, that information could lawfully have been provided to the next bank in the chain. If it had been, the next two banks would not have hired him or suffered losses.
If you are responding to a phone inquiry from a hiring institution, wait for the question, "Would you re-hire Mr. Ex?". Your answer here would be a truthful, short, to the point, "No". You can be sure there will be follow-up questions to this sort of response and you should be prepared to stick with your original answers. But refuse to elaborate. The inquirer will soon get the message.
Remember the Golden Rule when giving references; would you want to have your candidate's former employer lie to you when you are calling for a reference and tell you everything was OK when, in fact, there was a problem?
Of course not.
But neither should you be unfair to your former employees by slandering or libelling them. And your company would not be well-served by a "hip-shooting" or ill-considered response on your part.
Too many companies pass off the seeking of references to lower level clerical people, who often lack the sophistication to get more than superficial and often incomplete facts on prospective employees. To reduce the risk of hiring the wrong employee, assign this responsibility to the right person, preferably to the one who has the responsibility for hiring.
Do the same thing to protect yourself from a lawsuit when giving references on former employees. Assign the task high enough in the organization and have that person provide only carefully-considered, truthful information that can be substantiated by facts in each situation.
In smaller, less formal organizations, reference inquiries are often directed to the former employee's last supervisor, who may or may not be aware of the pitfalls in giving off-the-cuff responses. You may need to consider a policy requiring that all reference inquiries be directed to a particular person who knows the risks and who can respond in ways that will keep your company out of trouble.
Copyright © 1990 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 1, No. 5, 5/90
First published on 05/01/1990