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Nebraska Passes Bill To Provide Employers Limited Immunity On Employee References

Nebraska has followed the lead of dozens of other states by providing limited immunity to employers who provide certain information about employees and ex-employees. LB 959 was signed into law on April 10, 2012. Under the bill, an employer is provided limited immunity from liability for sharing both factual and evaluative information about former and current employees. The bill expressly allows the following information to be shared:

(i) dates and duration of employment;

(ii) pay rate and wage history on the date of receipt of written consent;

(iii) job description and duties;

(iv) the most recent written performance evaluation prepared prior to the date of the request and provided to the employee during the course of his or her employment;

(v) attendance information;

(vi) results of drug or alcohol tests administered within one year prior to the request;

(vii) threats of violence, harassing acts, or threatening behavior related to the workplace or directed at another employee;

(viii) whether the employee was voluntarily or involuntarily separated from employment and the reasons for the separation; and

(ix) whether the employee is eligible for rehire.

The bill creates a rebuttable presumption of good faith on the part of the employer, and the presumption may only be overcome by “a showing by a preponderance of the evidence that the information disclosed by the current or former employer was false, and the current or former employer had knowledge of its falsity or acted with malice or reckless disregard for the truth.” The bill further states that the employee must provide written consent to release such information in order for the immunity to apply. The written consent remains valid for six months. The bill also requires specific language for the consent and dictates that it must be in a standalone document or as a conspicuous part of an employment application. The required language is as follows: “I, (applicant), hereby give consent to any and all prior employers of mine to provide information with regard to my employment with prior employers to (prospective employer).”

In addition to the procedural hurdles, a sizeable loophole exists in the grant of immunity. The law states that the immunity does not apply if the employer is found to have discriminated or retaliated against the employee “because the employee has exercised or is believed to have exercised any federal or state statutory right or undertaken any action encouraged by the public policy of this state.”

LB 959 seems unlikely to appreciably change reference practices for most employers. The relative pros and cons of providing such information remain unchanged. Specifically, the employer obtains little benefit from providing more detailed information to prospective employers, and a risk of litigation for false or libelous statements from the offended ex-employee remains despite the protections in the bill. LB 959 does not require any information exchange. As such, prudent employers will likely remain guarded in the information they provide about ex-employees. Moreover, the law places an additional, albeit relatively slight, burden upon the new employer to obtain the appropriate form from the applicant in order for the law to apply.

Spencer Fane continues to advise its clients to develop a consistent and comprehensive policy with respect to what information is provided upon request for a reference, and apply the policy in a uniform manner for all employees. Despite Nebraska’s intentions of “loosening the lips” for employers, providing only basic information that is verifiably true and accurate remains the safest course. Spencer Fane, however, is well-situated to aid Nebraska employers wishing to take advantage of the protections afforded by this new law, including assistance in modifying application forms and processes.