Reference Checks & Defamation: Legal Risks for Employers

 Posted on October 17, 2025 in Employment Law

Business owners want to be honest when a prospective employer calls for a reference. Unfortunately, one misplaced word can potentially trigger a defamation claim by the employee. In Illinois, reference checks walk a tightrope between honesty and liability. While state law grants employers some immunities, those protections only apply if the employer acts in good faith while providing truthful, work-related information.

All Illinois employers must have a solid understanding of what the Illinois Employment Record Disclosure Act allows, as well as how to design policies that protect your business and your reputation. Small business owners, in particular, who are less able to afford to defend a defamation claim, should keep reference policies factual and straightforward, confirming only employment dates, title, and eligibility for rehire.

If you feel that you should include performance details, make sure to cite documentation rather than your own impressions. These strategies, along with others, can help keep your small or large business out of legal hot water. A Schaumburg, IL employment law attorney can ensure that you know and follow all the legalities associated with providing a reference for a former employee.

What Statements by an Employer Can Trigger a Defamation Claim?

Defamation occurs when a false statement of fact harms another’s reputation, or, in the case of employment law, harms another’s ability to secure employment. There are things that employers can and should not say when called for a reference. Some things that employers should avoid saying – even if they personally believe it to be true – would include:

•  "He was lazy." (vague opinion framed as a fact, although stating – with evidence – that the employee was late to work 60 percent of the time might be allowed)

• "She was unstable." (also a vague opinion framed as a fact)
• Any personal opinion that is not supported by employee records, like "She had a bad attitude," should be avoided.
• Any rumor or assumption regarding the reasons for termination without rock-solid proof should be avoided.
• Employers should not make any remark regarding the employee’s age, race, gender, disability, or religion.
• Disclosing a former employee’s health condition could violate privacy laws (i.e., "Her mental health issues caused her to miss a lot of work."
• Any statements regarding the employee’s character beyond the scope of employment should be avoided.

What Employers Can Say When Called for an Employee Reference

An employer can be sued for slander (spoken) or libel (written) if statements are false or cause harm. Under the Employment Record Disclosure Act (745 ILCS 46/), employers have qualified immunity for sharing truthful, job-related information. If the employer acts with malice or reckless disregard for the truth, this immunity is lost. This applies to statements about job performance, qualifications, or misconduct. Employers can safely say the following when asked for a reference:

• Dates of employment
• Job title
• Job duties
• Salary history is requested and permitted
• Documented performance metrics
• Disciplinary actions verified by records
• Statements backed by written warnings or evaluations

Tips for Small Businesses Regarding References

All reference requests should be documented, including notes or an email log of who was spoken to and what was said. References should always be routed to one trained manager or HR contact, who confirms only title, dates, and eligibility for rehire unless written consent authorizes more. Require all job applicants to sign a release allowing you to provide factual information, and when in doubt, quote directly from the individual’s personnel file. Remember that an offhand comment or an informal call often triggers defamation suits.

Contact a Schaumburg, IL Employment Law Attorney

Honesty is important, but so is restraint when it comes to providing references for a previous employee. If you have any doubts about what you can and cannot say about a previous employee, your best course of action is to speak to an experienced Schaumburg, IL employment lawyer from The Miller Law Firm, P.C.. Attorney Miller has an MBA in Finance, in addition to his law degree. Our firm can help ensure your business stays legally compliant when hiring or providing references. Call 847-995-1205 to schedule your free consultation.