Reference Letters and the Law: The Power of a Positive (or Negative) Reference

A good reference letter can go a long way to help you land a job. They’re also invaluable to employers, looking to check out the claims an applicant has made in their resume or interview. But, both employers and employees have misconceptions about how the law applies to getting or providing a reference. Does your former employer need to give you a reference? Do you have to decline to comment if you don’t have anything nice to say? What can you do if your boss gave you a bad reference?


Employees often mistakenly believe that they have a right to a reference letter– or at least a right to have some one confirm their employment. Unfortunately, this isn’t the case. References are normally purely voluntary. In fact, some large businesses have (likely misguided) policies that prevent management from providing a reference letter.

However, if you’ve been wrongfully dismissed or just not paid enough “severance pay”, Courts take a harsh view of employers who withhold a reference letter. As the Court sees it, severance pay or wrongful dismissal damages compensate employees for the time it might reasonably take them to find a new job. Because of this, employers may have a hard time arguing that they don’t need to pay damages if they didn’t do anything to help the worker in their job search.


Another common misconception is that employers can’t provide negative information when called for a reference. While it might not be the best idea, there’s nothing illegal about providing your honest opinion about a former employee’s shortcomings.

Employers get a considerable amount of protection under what lawyers call the “qualified privilege” to share their honest opinions about employees in reference calls. For example, in one recent case the Ontario Court of Appeal upheld a trial decision refusing to order an employer to pay when his negative comments cost a former employee a job opportunity. In reaching this decision, the Court agreed that the worker had been “defamed”. But , it refused to lift the qualified privilege protecting the employer because he had shared his honest opinions and hadn’t done so maliciously.

However, bosses who do lie or act maliciously when called for a reference can face lawsuits if their comments damage the employee’s reputation or cause them to lose a job opportunity. In addition to the risk that a bad reference might increase a former employee’s wrongful dismissal damages, employers badmouthing a worker may face a defamation suit.


To address this concern, employment lawyers often work with dismissed employees and their former employers to come to an agreement about the wording of a reference letter when negotiating a severance package. Because of this, your severance package or settlement documents might actually require your employer to provide a reference letter – or at least a letter confirming the details of your employment (aka an “employment letter”).

The same documents might limit what your former boss can say when called for a reference. If you fall into this category, you may well have a right to certain type of reference. You might also have recourse to the courts if your employer deviates from the script you agreed to.

Read your severance package carefully. Consider talking to an employment lawyer about whether it properly addresses your need to confirm your employment history or the quality of your work.

Decisions Referenced:

You might be interested in some of our other blog posts:

• Negotiating a Better Employment Contract 

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