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NJ Bill Would Ease Sharing of Job References

Legislation that would shield employers from liability exposure for providing truthful employment-related information was reported out of the NJ Assembly Labor Committee on September 17. A-1350, sponsored by Assemblywoman Carol Murphy (R-26), was merged with a similar bill, A-911, sponsored by Assemblyman Joel Weingarten (R-21), into substitute legislation that was passed by the committee. The legislation is designed to address a common fear among employers when approached for a reference check on a former employee.

In an attempt to insulate themselves and their organizations from potential liability suits, many employers will only verify "the basics" of employment, such as dates of employment, position held and compensation. For many non-profit organizations, adequate screening of prospective employees is not just a matter of sound operational practice, but it can also have profound implications on program quality and safety.

The Assembly Labor Committee substitute for A-1350/A-911 exempts an employer from civil liability when the employer, in good faith, discloses any information about the job performance or reason for termination of employment of an employee or former employee to a prospective employer of the employee, at the request of the prospective employer, the employee or former employee. The immunity also applies if the information is requested or required by a federal, State or industry regulatory authority. Employers who disclose such information shall be presumed to be acting in good faith unless it is shown by clear and convincing evidence that the employer acted with actual malice. The bill is now awaiting a vote by the full Assembly.

Non-profit employers can reduce the risk of defamation suits by divulging only truthful, job-related information about former employees, and by doing so only after explicit written authorization is obtained from the employee. It is also advisable to centralize reference information so that only one person, who understands the risks and employee performance evaluation processes, is authorized to provide references.

For more information regarding the Assembly Labor Committee substitute for A-1350/A-911, contact Linda Czipo at the Center. Non-profits interested in employment-related risk management issues may also want to refer to Hiring, Firing, Retiring: A Personnel Practices Guide for New Jersey Nonprofits, by Jennifer Chandler Hauge, Esq. This 160-page reference book is available for purchase exclusively through the Center. Click here for more details.

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