The Benefits of Neutral Reference Policies

Neutral reference policies are standard fare in corporate America. Even small, privately owned companies develop them as a means of avoiding trouble in the event an unhappy former employee makes accusations of defamation or discrimination. The question is, are such policies a good idea?

There are definite benefits to neutral reference policies that should be considered. The three most important are:

1. Protection Against Litigation

Federal law prohibits providing negative or false employment information about a former employee due to that person’s ethnicity, color, religion, sex, etc. Unfortunately, it’s too easy for disgruntled former employees to accuse companies of giving bad references for such reasons. Once accused, how does a company defend itself?

Lawyers recommend neutral reference policies to avoid this very thing. Therefore, some organizations have policies restrict HR personnel and managers to providing verifiable information like name, employment dates, and position(s) held.

2. Protection Against Accidental Slipups

Written policies further limit litigation by also protecting against accidental slipups. Imagine a company with a neutral reference policy that applies to HR but not to middle managers. A middle manager might say something that could be construed as defamatory. Consistent policies across the board make it clear to everyone in your organization that reference feedback must be neutral.

3. A Better Company Reputation

A third benefit of neutral reference policies is that of protecting your company’s reputation. For example, a company might offer a glowing reference for a former employer who turns out to be a dud on his next job. Suddenly, the new employer thinks the former employer either doesn’t know how judge quality or has lax standards. A company can best preserve its reputation by avoiding the risk altogether.

Neutral reference policies aren’t right in every situation, but they do fit the bill for some companies. Ultimately, every employer has to make its own decision.