New Protections For Employers Reporting Sexual Harassment Claims In Reference Checks

California employers for the most part play it safe by following their job reference policies allowing them to state period of employment, job title, and possibly compensation (with the employee’s consent). For those who go beyond these basics, there is a dilemma when asked to respond to a reference check regarding a former employee who has had his or her employment terminated due to an accusation of sexual harassment. Thus, by informing a future employer of an employee’s misconduct, the former employer opens itself up to a defamation claim by an employee claiming he or she was falsely accused.

This “play it safe” approach is something that is antithetical to the “me too” movement, as it allows alleged and/or proven sexual harassment to remain confidential. The Legislature’s solution, effective January 1, 2019, is to create a qualified privilege for employers acting on “credible evidence.” The Legislature did this by amending Civil Code Section 47(b), which provides that a “publication or broadcast” made as part of a “judicial proceeding” is privileged. The amendment will extend the privilege to certain communications related to sexual harassment in the workplace.

As a result, the former employer who makes statements about sexual harassment will be protected for statements made in good faith during an investigation into claims of sexual harassment, as well as for the employer’s statements confirming whether the former employee was terminated due to the alleged harassment. The employee may still file suit for defamation, but in order to prevail must prove the employer acted with “actual malice,” which generally means the employer was motivated by hatred towards the harasser or acted without having a reasonable basis for believing the truthfulness of the accusation. An employer acting in good faith to recount accusations based on credible evidence will be able to meet this standard and overcome the defamation claim. On the other hand, the standard also protects the falsely accused employee from an employer’s statements made with actual malice. Overall, this new law will assist employers who have become aware of credible reports of harassment by a former employee, but who fear disclosing this information to a prospective employer because of a potential defamation lawsuit by the former employee.

This amendment may or may not change things in terms of employers’ cautious approach to making statements about their former employees. That said, for those employers who are willing to go beyond the “play it safe” approach, it will allow them more protection in warning prospective employers about their former employees who have been investigated or terminated as a result of sexual harassment issues.

We have extensive counseling and litigation experience in this area. If you would like to discuss this issue further, or have any questions about this blog, please contact us.