Court Broadens Liability for Job References

The California Supreme Court, imposing a new legal rule for letters of recommendation, decided Monday that an employer may face monetary damages for giving a positive job reference to a worker who presents a potential safety risk.

California employers already can be held liable for defaming a departing worker with a negative reference. Now for the first time, employers face lawsuits for omitting information that shows the worker poses “a foreseeable and substantial risk of physical harm” to others.

The unanimous ruling came in a lawsuit charging that three school districts in the Central Valley wrote glowing letters of recommendation for a vice principal who had been accused of sexual misconduct. But the decision may have ramifications for other types of employees who could foreseeably cause physical injury, including workers who have been accused of sexual harassment.

“The decision basically tells employers, ‘Do not give references,’ ” said Fresno lawyer Robert J. Rosati, who represented two of the vice principal’s previous employers. Rosati said he will now advise school officials to tell only “name, date and serial number” in requests for recommendations.

Other employment experts agreed that rather than encouraging disclosure, the decision probably will have a chilling effect and make employers even more wary. Several lawyers speculated that the decision, by prompting more employers to keep their lips sealed, will spur the already flourishing industry of pre-employment background checks.

Moved by concerns about everything from workplace violence to embezzlement and unable to get reliable information from former employers, many companies already are digging ever more deeply into job applicants’ backgrounds.

The state high court was mindful that many employers might not know what information should or should not be disclosed. The ruling stressed that employers are not obligated to report all of a worker’s faults, such as excessive absences, and can avoid risking a lawsuit by writing a “no comment” letter or by merely verifying dates of employment.

But if employers write a letter of recommendation, they can be sued if they leave out facts that amount to an “affirmative misrepresentation” of the worker’s potential danger, the court held.

“The writer of a letter of recommendation owes to prospective employers and third persons a duty not to misrepresent facts in describing the qualifications and character of a former employee,” the majority opinion by Justice Ming W. Chin said.

In the case before the court, Robert Gadams allegedly molested 13-year-old Randi W. in 1992 in his vice principal’s office at Livingston Middle School in Merced. According to the court’s opinion, Gadams “negligently and offensively touched, molested and engaged in sexual touching.”

Gadams eventually pleaded guilty to unlawful touching of a minor, according to lawyers in the case.

Randi W. filed a lawsuit against the Livingston Union School District and three other Fresno and Kern County districts that had provided references for Gadams.

One of Gadams’ previous employers gave him a “detailed recommendation” even though, the lawsuit alleged, officials in the Mendota Unified School District knew he had hugged some female junior high school students, given them back massages, made sexual remarks to them and was involved with them in a “sexual way.”

A recommendation from an official of the Mendota district noted only that Gadams had “genuine concern” for students and “outstanding rapport” with everyone. The letter concluded, “I wouldn’t hesitate to recommend Mr. Gadams for any position!”

The Muroc Joint Unified School District also gave Gadams a positive recommendation although it had disciplined him for sexual misconduct and forced him to resign, the suit said.

The references from two Muroc officials described Gadams as “an upbeat, enthusiastic administrator who relates well to the students” and who was “in large part” responsible for making the campus “a safe, orderly and clean environment for students and staff.”

The court concluded that the letters strongly implied Gadams “was fit to interact appropriately and safely with female students.”

“We view this case as a ‘misleading half-truths’ situation in which defendants, having undertaken to provide some information regarding Gadams’ teaching credentials and character, were obliged to disclose all other facts,” Chin wrote.

As a result of Monday’s decision, Randi W. can now take her lawsuit against Gadams’ former employers to trial in Fresno County Superior Court. Rosati said the two districts he represents will contest allegations that they knew of any sexual improprieties.

Calling the ruling “just wonderful,” Scott Righthand, a San Francisco lawyer who represents Randi W., said it will help protect schoolchildren.

“The Supreme Court has put its foot down and said no, it’s not OK in the state of California for past employers to make affirmative representations about someone who they know has been a problem and has been involved in alleged sexual misconduct that could result in another molestation down the line,” Righthand said.

Paul Grossman, general counsel of the California Employment Law Council, which represents 60 of the state’s largest employers, called the ruling a “common sense” approach. He said employers will be relieved that they won’t need to include every negative fact about a worker in a recommendation.

“I think we’re talking about violence, propensity for violence and sexual harassment” as faults that must be reported if a letter of recommendation is provided, he said.

But defense lawyers in the case contended the decision has broader repercussions. Rosati said the ruling could apply to any employee who might cause a physical injury, such as a driver, an operator of heavy equipment or a physician.

“If you want to be safe, if you don’t want to get sued for defamation or blackballing or sued for misrepresentation, don’t say anything,” Rosati said. “What it means is good employees don’t get the benefits of being good employees” and receiving positive job references.

C. Michael Carrigan, a Fresno lawyer who represented the Muroc district, predicted the ruling will have the biggest impact on references for employees who had a good record but were rumored to have a problem, such as excessive drinking or sexual harassment.

“So it is those types of employers that this will have the biggest effect on because they can’t give a good reference about a good employee without also bringing up this negative information, even if it is just a rumor,” he said.

Julie Grosse of the Polly Klaas Foundation in Petaluma called the ruling a “step in the right direction.”

“We constantly seem to be fighting this right to privacy . . . and children have a right to know what their dangers are,” Grosse said. “We are in a position as adults to make things safe for them.”

Although employers have qualified immunity from defamation suits by workers who received negative references, many employers simply refuse to disclose anything but basic information for fear of getting sued, several lawyers said.

In a concurring and dissenting opinion, three justices thought the majority also should have made the previous school employers liable for failing to report Gadams’ behavior to child welfare authorities.

The majority held that Randi W. was not part of a legal class of persons that a reporting law was designed to protect. But Justices Joyce L. Kennard, Marvin R. Baxter and Kathryn Mickle Werdegar disagreed.

Dolan wrote from San Francisco and Silverstein from Los Angeles.