The single best predictor of an applicant's potential performance as an employee is the strength of the applicant's references. No resume review, background check or fair credit report can substitute for a few good phone calls to the applicant's former employers. Yet many Arizona employers fear that providing honest reference information may result in defamation lawsuits or other legal liability so such calls are often greeted with only "neutral reference" information. Thanks to the Arizona Legislature, these fears may be unjustified.
Arizona law provides immunity to employers who supply information to a requesting employer concerning an employee's job performance, evaluation, professional conduct or reason for termination provided the employer supplies the information in good faith. (A.R.S. § 23-1361 (C))
For employers with more than 100 employees there is a presumption of good faith if the employer has a "regular practice" of providing such information upon request by a prospective employer. And for employers with fewer than 100 employees there is a presumption of good faith if the employer provides only information about the reason for termination of a former employee or about the job performance, professional conduct or evaluation of a current or former employee.
Because the immunity provided under Arizona's statute is broader than the protection provided by a neutral reference policy under common law, Arizona employers are well advised to take advantage of the statute by having a "regular practice" of providing information about job performance and the reasons for termination. Such a practice not only provides immunity to the disclosing employer but it is also benefits Arizona employers in general because it encourages the free exchange of information and thus empowers all employers to make better hiring decisions.
If you would like to take advantage of the immunity provided by this statute and help fellow employers make good employment decisions, please contact your Quarles & Brady LLP lawyer and adopt a reference policy that complies with Arizona's statute.