What do you do when you receive a call asking about a former employee? Providing a reference is a potential legal landmine. If you paint the person in an unfavorable light, causing them to lose the new opportunity, you could be facing any number of lawsuits, including one for defamation. If you portray the person as an excellent worker, when he was one of your worst, the new company may choose to hold you responsible for its bad hiring decision.

As is true with most human resource management issues, the best policy regarding references is to have a company policy. That policy should state that, upon request from a third party, your business will provide the name, dates of employment and position held. Authorize one person to handle reference requests. Other employees should be clearly informed that, without authorization, providing references on behalf of your company is considered misconduct. If certain supervisors are permitted to provide references for highly regarded former employees, you should have guidelines for those supervisors to follow.

When you receive a phone call requesting information, ask the identity of the caller and why the information is being sought. Take the name and number of the person for follow up. Then request that the person put their inquiry in writing on letterhead. In response, provide only the position held and dates of employment. Explain that your company policy dictates no further information be provided without a written release from the former employee. You can add that this doesn’t imply anything negative about the individual.

Some former employees, unhappy with the limited information policy, may contact you directly and ask that you issue a reference letter. No reference letter should be issued without a written release from the individual. If you are requested to write a letter and you have a release, you may choose to issue a positive letter or a “neutral” reference letter. In your neutral letter, limit your remarks to objective commentary. You may list the tasks performed within each position during the individual’s time with your company, and reflect any promotions. If the employee met goals or standards, but was not a stellar performer, avoid effusive adjectives and just stick to the functions they carried out in a satisfactory manner as set forth in the job description.

Where references are concerned, usually less (said) is more (legal protection).

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