Defamation and Reference Checks

By Colin Edstrom
Categories: Blog, Employment Law

Reference checks can put former employers in an awkward position. Employers want to tell the truth but may be concerned about the potential legal consequences of providing a bad reference. However, a recent case out of Ontario suggests that employers should not be afraid to tell the truth when asked to provide a reference for a former employee.

In Papp v. Stokes et. al., 2017 ONSC 2357, Mr. Papp’s employment was terminated without cause after 2.5 years of employment. Following his termination, Mr. Papp asked the President of his former employer, Mr. Stokes, to be a reference for him. Mr. Stokes agreed. Mr. Papp started looking for new employment and was advised by a potential new employer that he was its number one candidate subject to a successful reference check. The prospective employer contacted Mr. Stokes who informed the potential employer that there was “no way” he would re-hire Mr. Papp, he was “not that pleased” with the quality of Mr. Papp’s work, that Mr. Papp “has a chip” on his shoulder, and that Mr. Papp was let go because of performance and attitude issues. Mr. Papp was subsequently advised by the prospective employer that he would not be offered the job because of the reference check. Mr. Papp sued Mr. Stokes and his former employer for, amongst other things, defamation.

The Court disagreed with Mr. Papp’s argument that he had been defamed, finding that Mr. Stokes characterization was protected by two defences: (1) it was truthful; and (2) it was made in a protected context and thus was protected by qualified privilege.

With respect to the former, truth is a complete defence to defamation. At trial, the former employer called a number of witnesses who confirmed the accuracy of Mr. Papp’s statement. While the statements made by Mr. Stokes hurt Mr. Papp’s reputation, they were true and, as a result, the defamation claim failed.

With respect to qualified privilege, the prospective new employer had an interest in receiving the information and Mr. Stokes had a corresponding duty or interest to communicate the information. As such, the statements were made in a protected context. Given that the statements were not reckless or made in malice, the defamation claim was unsuccessful.

This decision is good news for employers who are apprehensive about providing negative references for former employees. The old adage remains true today: honesty is the best policy. An employer will likely be able to insulate itself from a successful defamation claim where a negative reference is substantially true or so long as it is not malicious or reckless.