THE SOUTHERN CALIFORNIA JOB MARKET: WHERE THE JOBS ARE : PITFALLS : Name, Rank, Serial Number : Fearing Lawsuits, Employers Won’t Say Much More

In this litigious age, it’s getting harder and harder for employers to get honest answers when they check the references of a prospective employee.

Tell someone a former employee is an inept jerk and you’re liable to get sued. Tell someone that the inept jerk was “employee of the month” nine times and you’re also liable to get sued. Name, rank and serial number are becoming the order of the day.

“Society has made the choice, rightly or wrongly, that they prefer people be able to put their mistakes behind them, and a goof on one job should not haunt them the rest of their lives,” says Angel Gomez III, a Los Angeles employment law specialist who represents management.

“That’s probably not the intent, but that’s the effect of all these rules and regulations,” adds Gomez, a lawyer with Hill, Wynne, Troop & Meisinger. “Right now, all of the rights are on the side of the employee.”

As a result, no one wants to say anything about anybody.

In a recent survey of 200 big-company executives conducted by Robert Half International, the San Francisco-based employment agency, 68% of the executives said it was harder to check a candidate’s references than it was three years ago. Three-fourths of the executives said companies are giving less information during reference checks than they were three years ago.

The trend makes picking good people that much more difficult. Experts insist that reference checks really do count.

“One of the most effective ways to ensure a good hiring decision is to conduct a thorough reference check,” says Max Messmer, chairman and chief executive of Robert Half, which specializes in the accounting, finance and information-systems fields.

“But today, this process is often a double-edged sword,” he says. “New and tougher laws require employers to inquire more extensively into an applicant’s background or risk serious liability. At the same time, our litigious society is increasingly forcing former employers into taking a position of no comment.”

This can be good for potential employees, but for employers it presents an obvious Catch 22. Fearing a suit if something goes wrong, employers know they better ask. But fearing a suit if they answer, employers know they better keep their mouths shut.

Indeed, these days past employers frequently will do little more than verify employment dates and title, Messmer says. Even salary information is difficult to obtain without a written authorization from the applicant, recruiters say.

Compounding the problem is a growing eagerness on the part of applicants to lie or exaggerate on their resumes.

“Most striking in the entire employment process is the willingness of applicants to falsify education credentials and experience,” says a Northwestern University survey of companies to assess the 1993 job market.

As a result, the annual survey found that substantially more employers are verifying education and past employment than five years ago. Also more popular are checks of credit records as well as police and court records.

Indeed, a small industry has sprung up to do nothing more than check into the backgrounds of employment prospects. The Credit Managers Assn. of California, for instance, a Burbank-based nonprofit credit reporting agency, runs a pre-employment screening service that will check a job applicant’s employment history and credit record as well as any criminal convictions for a fee of $110.

At Korn/Ferry International, the executive search firm, references are interviewed as part of the normal screening of job applicants.

Falsification is unusual at the senior executive level--$100,000 a year and up--in which Korn/Ferry specializes, says Peter Kelly, who oversees searches for financial services executives in the West.

But determining how a candidate works with others and whether an applicant’s style fits that of the company is key. Thus, Kelly says, “references are a crucial, crucial part of our work. We take it very seriously.

“We pick up everything from social graces and behaviors to their skills,” Kelly says. “If you talk to enough people you tend to find the soft spots.”

Kelly says he gets around taciturn sources by asking the candidates to provide several references. He often goes to others in the industry who may not be on the job candidate’s list.

“In most instances, people are very willing and enthusiastic references on somebody’s behalf,” Kelly says. “In other instances, they’re not quite so enthusiastic and have opinions that they’re guarded in sharing.”

Getting the reluctant ones to talk “is the art to it,” Kelly says. And of course, in some cases, silence on the part of a reference speaks volumes.

Messmer says reference checking is so important because “it’s very hard in an interview to find out all you need to know to hire someone.”

“There is no more costly a mistake than a hiring mistake,” he adds.

One Los Angeles company recently found that out too late. After hiring a top executive, “the lack of people skills came to the fore,” Messmer says.

“If they had managed to speak to even one of the candidate’s subordinates they would have gotten a very different picture of the person,” he says. “The person lasted about six months and it was a very disruptive experience for the company.”

There are ways to do your duty on the reference front--both checking and giving--without ending up in court.

Just as in the interview process, certain questions are off limits in checking references. You can’t ask about race, marital status, religion, age or handicaps, among other things.

It helps to make it clear to candidates that you plan a thorough reference check. Enlist their help in getting references to be forthcoming.

If possible, get the candidate’s written approval first--maybe even get your prospect to sign a release protecting those giving references.

Messmer suggests starting at the bottom of the reference list and working your way up, on the theory that a candidate would list the most flattering references first.

Checking references is a job that is best not delegated, Messmer says. In addition, a candid conversation is more likely if the person doing the check talks to a counterpart at the other firm--controller to controller, for example, he said. But don’t forget peers and subordinates.

All information must be kept confidential even from other employees in your company unless they really need to know, Messmer says.

For the former employer, the best way to deal with the problem may be to negotiate it away, particularly when employee and employer have parted company in a less-than-friendly fashion, Gomez says.

As part of the “separation agreement,” one person is designated to take any reference calls and is authorized to say only the things to which everyone has agreed.

Gomez likes to point out to employers that it is in their best interest to see former employees find new jobs fast.

“If they are re-employed quickly they are less likely to file a lawsuit,” Gomez says. If they do file a suit, then potential damages would be lower if the job searches were relatively short.

There is, of course, a limit to the value of references. “The common experience is to take reference checks with a grain of salt,” Gomez says. “You don’t bet the company on a reference check.”

Despite the effort devoted to reference checking, potential employers realize that even a dismal evaluation can sometimes be off the mark.

A classic example was the way one movie studio executive assessed a job candidate:

“Can’t act. Can’t sing. Balding. Can dance a little.”

Fred Astaire eventually proved him wrong.