I Filed a Lawsuit Challenging My Termination. Can My Former Employer “Bad-Mouth” Me to Prospective Employers?

Last updated Feb. 22, 2018.

Being a plaintiff in an employment law claim is not an enviable position to occupy. First, you’re fired in violation of anti-discrimination, retaliation, and/or whistleblower laws. Then, you’re tasked with finding a reputable attorney and surviving the various stages of litigation. In the meantime, you need to look for another job — not simply to replace wages, but to prove to the court you are meeting your legal duty to attempt to “mitigate” the economic damages you suffered as a result of termination. Seeking alternate employment assures the court you’re making a good faith effort to minimize your losses, rather than crossing your fingers and banking on a larger settlement or verdict from the defendant.

But the search for another job brings up a thorny issue for employment plaintiffs: Reference checks. To be an attractive job applicant, you likely need to reveal your last prior employment to convince your prospective boss that you have a steady work history. Yet what if your prospective boss contacts your former employer to confirm you indeed worked there? Can your former employer disparage you to your prospective boss? Can your former employer inform your prospective boss about your lawsuit? And can your prospective boss refuse to hire you because of that lawsuit?

As I’ve stated before on this blog, the answers are complicated and dependent upon the details. After more than two decades practicing employment law, here is my general take on these types of situations, with caveats.

Former Employers and Legal Liability with Reference Checks

In my experience, former employers often, but not always, refrain from disparaging plaintiffs or discussing the allegations of their lawsuits as part of reference checks because doing so may expose them to legal liability under New Jersey law:

• Defamation: If a plaintiff can prove that (1) her former employer knowingly or negligently communicated a false statement about her to a prospective employer, and (2) she suffered damages as a result, then the former employer may be liable for defamation.
• Tortious Interference with a Prospective Contractual Relation: If a plaintiff can prove that (1) her former employer intentionally and without justification interfered with her prospective contract for employment, and (2) she suffered damages as a result, then the former employer may be liable for tortious interference.
• Retaliation: In New Jersey, in some cases, even post-termination conduct by your former employer, such as bad mouthing you to prospective employers, can be the basis of an unlawful retaliation claim under the anti-retaliation laws.  

As a result, many HR departments respond to inquiries from prospective employers by simply confirming the dates which former employees worked.

That’s the good news. However, defamation and tortious interference laws are no guarantees against meddling by a former employer. That’s because:

• These laws require a high standard of proof and allow employers generous defenses. For instance, with respect to defamation, a plaintiff must show that her former employer not only acted knowingly or negligently, but also made a statement about her that was objectively false. Moreover, matters of “opinion” are not protected. This means your former boss cannot state, “she showed up late every day” when in fact this only occurred once. He can, however, state “I didn’t like her” or “I felt she was negative,” if that is his opinion of you.  
• Evidence is difficult or impossible to gather. Since plaintiffs are not privy to the conversations their prospective employers have with their former ones, it is notoriously hard to prove that defamation or tortious interference has occurred.
• Absent a binding agreement to the contrary, an employer is not prevented from acknowledging the existence of a former employee’s lawsuit. Again, due to the liability risks described above, employers would do well not to discuss the details of the allegations in an employee’s legal complaint. However, they may state that the complaint was filed.

Because of the foregoing, it is imperative that employment law plaintiffs always secure a confidentiality provision as part of any settlement or post-verdict agreement. Such a provision should preclude the former employer from discussing the employee with prospective employers, outside of confirming dates of work.

Prospective Employers and Discrimination Lawsuits

Let’s assume your prospective boss is told by your former employer that you are suing them for, say, age discrimination. State anti-discrimination laws prohibit your prospective boss from refusing to hire you based on the fact that you made an age discrimination claim. 

The problem for you as a plaintiff, again, is evidentiary. Let’s now assume that your prospective boss unlawfully rejects you for a job because your former employer informed him of your age discrimination suit. Unless you are privy to those communications between your former and prospective employers, it is difficult to prove that your age discrimination suit played a factor in the decision not to hire you.

Filing an employment lawsuit? Call us

Given the above, it’s obvious that filing an employment lawsuit is a decision that should not be taken lightly. If you’re considering this route, call our offices today for a free consultation about the potential risks and rewards of an employment law claim.