Positive reference gets company sued

Companies often withhold negative information about former employees to avoid defamation claims. But here’s how being too positive can cause legal problems.
An anesthesiologist was fired after he was caught using narcotics at work. But when he tried to get another job two months later, his old boss told the new employer he was “an excellent clinician” and “would be an asset to any anesthesia service.”
After he was hired by the new company, he came to work high and almost killed a patient. The patient sued and won $8 million. So that company sued the man’s old employer — and won.
Reference check liability

A lot of companies choose not to give references at all, and just confirm employment dates and titles. If that’s what the supervisor in this case had done, the company might’ve been in the clear.
But the court made a distinction between not giving a reference and knowingly giving a false reference. As the judge said, once the supervisor volunteered to give any information about the employee’s performance, he was obligated to tell the whole truth.
Cite: Kadlec Medical Center v. Lakeview Anesthesia Associates