Unofficial, or "backdoor references," i.e., those gathered from sources that the candidate does not explicitly provide, can sometimes yield a more honest perspective on the candidate. While technically not illegal, the very same freedom that allows an unofficial reference to be totally honest about your candidate may backfire on you. In general, the best practice is to use the list of references provided by the candidate.
Unofficial references have no obligation to provide and substantiate negative reviews. In sum, you have no reason to trust an unofficial reference; if they're untruthful, or misrepresent the candidate for personal reasons, the candidate might have grounds to sue for defamation.
State Laws on Employee References
Most states have laws that govern the referral process. Generally, so long as employers follow these rules, they have immunity against lawsuits for defamation and slander. California, for example, protects employers from lawsuits as they provide references based on truth, and describe job-related things such as performance, eligibility for rehire, and qualifications. On the other hand, if the employer chooses to give a more detailed reference, then they could be held liable for omitted details, such as criminal records.
Top Tips for Employee Employee References
Here are five top tips you can apply to conduct your reference check process to avoid harming yourself or your candidate:
1) Make sure you have the candidate's consent
Get it in writing that you can conduct blanket background checks. Otherwise, there are privacy concerns. Moreover, invasive background checks might irk the candidate and potentially cause them to reject your offer, if you make one. If you can't get their consent, you could expose yourself to liability.
2) Don't contact someone at the candidate's current workplace if that person isn't explicitly provided as a reference.
If the candidate hasn't told anyone they're looking, you run the risk of exposing their search to their management.
3) Assume that if you do get a reference from an unofficial source, then the candidate will hear about it.
Negative references are less likely to make it back to the candidate, but you risk a breach of trust when the candidate hears from someone who praised them.
4) Be skeptical. Don't use the review as a sole reason to reject the candidate.
Regardless of whether it's negative or positive, you can't know the context of the reference, and you can't be assured of its reliability. Consider multiple references together. You have no way of knowing that any reference is telling you the truth.
5) Be careful.
If the candidate wants to know the contents of the reference, you're obligated to respond truthfully. Negative references can become the basis for defamation lawsuits.
General Information on Employee References