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On September 23, 2003, the Wisconsin Court of Appeals ordered an employer to pay $283,000 in compensatory and punitive damages to a former employee for making negative statements about that employee during a reference check. Gibson v. Overnite Transportation Company (Wis. App. 09/23/2003). Overnite had a conditional privilege under Wisconsin law. However, an ex-employee was able to prove defamation.
Background
James Gibson worked for Overnite for approximately five months at a non-union facility. The Teamsters went on strike at a Milwaukee terminal that Gibson was to service. While delivering freight to the Milwaukee terminal, the Teamster supporters harassed Gibson. Gibson did not like the harassment and told his terminal manager, Tim Behling, that he had to quit immediately to help his ailing grandfather's company. Gibson admitted at trial that this was a lie. He immediately applied for a job as a temporary driver at USF Holland. During USF's reference check on Gibson's employment background, Tim Behling was called. Behling said:
"Gibson was way below average." "He needed to improve his work ethic and attitude." "He was late most of [the] time and he missed anywhere from 2-3 days a week." "He had a real problem with authority." "He has a very negative attitude." "He's everybody[']s best friend - so he thinks." "He did not get along with some people, but most saw through him." "His paperwork was fair. It needed help like you wouldn't believe."
Behling also indicated that Gibson's trustworthiness was "borderline," and that he would "never" rehire Gibson. Overnite was the only former employer to offer a negative report on Gibson. Based on the report, USF Holland terminated Gibson's temporary employment.
The jury awarded Gibson $33,000 in compensatory damages and $250,000 in punitive damages, for a total of $283,000.
The Court of Appeals held Overnite liable even though the employer had a conditional privilege under Wisconsin law, Wis. Stat. §895.487, to make statements during a reference check. The Court held that in order to prove a claim of defamation, the employee only needs to show express malice, not actual malice. Actual malice requires the knowledge of false information or reckless disregard of the truth. However, express malice only requires ill-will, bad intent, envy, spite, hatred, revenge, or other bad motives against the person defamed. The Court, analyzing Wis. Stat. §895.487(2), said the law provides three ways in which the presumption of good faith may be rebutted:
- 1. "The employer knowingly provided false information in the reference;"
- 2. "The employer made the reference maliciously;" or
- 3. "The employer made the reference in violation of another Wisconsin Statute."
Accepting the lower standard, the Court of Appeals affirmed the jury's verdict.
The Future
In light of this decision, it is important that an employer and all of its agents (managers and supervisors) give accurate information that can be verified in reference checks. All opinions should be avoided unless based on objective and "provable" facts. In this case, supervisor Behling clearly overstepped the line with his personal opinions about Gibson's work performance, work ethic and attitude. A recommended process to minimize defamation claims is to provide the reference comments to the former employee in a written document before the information is provided to the company requesting the reference. The employee should acknowledge the accuracy of the reference comments by signing the reference statement. By obtaining the employee's signature on the reference statement, the employee is asked to waive all claims of defamation against the former employer if this information is submitted to a prospective employer in response to a reference check. This process avoids any interpretation that suggests ill-will, bad intent, envy, spite, hatred, revenge, or other bad motives against the employee seeking the reference, who later could claim defamation based on an unfavorable but accurate reference.
In our 2003 edition of the Employment Law Manual for Wisconsin Employers, we provide the following form, which assists employers who choose to secure the employee's signature as described above in advance of giving out a reference check.
Sample Reference Check Release
I, [Former Employee's Name], have read the reference check below, prepared by [Former Employer] concerning my past employment and agree that the information is accurate to the best of my knowledge. I authorize [Former Employer] to provide this information to prospective employers for future reference checks and waive all claims against [Former Employer] to release of this information to prospective employers.
[Include relevant facts or answer questions asked by prospective employee]
___________________________________
[Signature of Former Employee]
[Include detailed, accurate reference information here.]
I, [Former Employer's Witness], witnessed the signature of the former employee [Former Employee's Name] on [Date].
___________________________________
[Signature of Witness]
(See the Employment Law Manual for Wisconsin Employers, Chapter 2, The Hiring Process, page 2-46)
Krukowski & Costello, S.C. © 2003
For more information regarding Krukowski & Costello's training programs and publications, please call (414) 423-1330 or e-mail Krukowski & Costello's educational services department.
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