New Nebraska Employee Reference Protections

Nebraska recently signed into law LB959, a bill that lets employers share more information to prospective employers about current and former employees with less threat of legal liability. In a nutshell, employers will be given a rebuttable presumption of good faith when they follow the law’s specific requirements. Employers should learn the new law’s requirements, and very real limitations, before changing policies, procedures and forms.

To obtain the protections of the new law, employers must first obtain a written authorization from the employee to release the information, and that consent must be signed and dated, and in either a stand-alone document, or be a conspicuous part of the employment application

(in bold and larger typeface) which states:

“I, (applicant), hereby give consent to any and all prior employers of mine to provide information with regard to my employment with prior employers to (prospective employer).”

Those employers obtaining that that specific consent will be given the protection for a period of six months when providing certain information, including:

Date and duration of employment;
Pay rate and wage history on the date of receipt of written consent;
Job description and duties;
The most recent written performance evaluation prepared prior to the date of the request and provided to the employee during the course of his or her employment;
Attendance information;
Results of drug or alcohol tests administered within one year prior to the request;
Threats of violence, harassing acts, or threatening behavior related to the workplace or directed at another employee;
Whether the employee was voluntarily or involuntarily separated from employment and the reasons for the separation; and
Whether the employee is eligible for rehire.

Employers should not be lulled into false confidence by this new law for several reasons. The protections are quite limited since the authorization is valid for only six months. Also, the presumption of good faith on the part of the employer does not apply if information disclosed turns out to be false and the employer either knew it was false, or acted with malice or reckless disregard for its truth. Where particularly subjective information is shared, such as the quality of job performance, this means employers may have little actual protection from lawsuits. Finally, the good faith presumption on the part of the employer can be overcome with a finding that the employer discriminated or retaliated because the employee “exercised or is believed to have exercised any federal or state statutory right or undertaken any action encouraged by the public policy of this state.” In summary, significant risk remains, and employers should maintain their caution when sharing any information about current or former employees.

Those wishing to obtain the protections of the law should examine and alter current policies and procedures with advice of counsel. Potentially conflicting legal requirements and company policies should be considered, for example, those pertaining to drug and alcohol tests. The new Nebraska law makes no direct changes to those, and many company policies provide assurances of confidentiality. Reference release forms and applications must also be reviewed, and will most likely require alteration to be in compliance. And as before, an employer’s best practices include keeping tight controls on the release of such information, with only one person in a company designated (and properly trained) to do so.