Human resources professionals and others in management positions have typically worried about being held liable for providing a negative recommendation, but employers also can be sued for false representations when providing a positive referral concerning an employee.

Consider the following case:

A physician group terminated an anesthesiologist partner for cause after investigating nurses’ concerns about his behavior in the operating room and shortages in the Demerol supply.

His termination letter, which was signed by all partners of the physician group, cited that his impaired physical, mental and emotional state prevented him from properly performing his duties and put their patients at significant risk.

A few months later, two physicians from the group provided referral letters stating that he was an excellent physician and would be an asset to any anesthesiologist group.

After receiving his curriculum vitae and the referral letters, a hospital in another state decided to hire the physician. The physician’s new employer requested information about him from the hospital where he had last practiced. Questions included whether he had been subject to any disciplinary action, if he had the ability to perform his work as an anesthesiologist, if he’d shown any signs of behavior or personality impairments and whether he had satisfactory judgment. The hospital responded by simply giving dates of employment.

Shortly thereafter, several patients under the physician’s care suffered adverse effects from not being properly anesthetized. One patient had to be revived after he received too much morphine during surgery. Another mistake left a tubal ligation surgery patient in a permanent vegetative state. When nurse supervisors reported him, he admitted to hospital management that he was addicted to Demerol and immediately checked himself into rehab.

The family of the tubal ligation surgery patient sued the anesthesiologist and the hospital. The hospital, in turn, sued the anesthesiologist’s former employers (both the hospital and the physician group) for misrepresentations about the physician. The federal court of appeals held the physician group and the two doctors who wrote the materially misleading letters liable. The hospital, which had simply provided dates of employment, was exonerated.

If requested to provide information about a former employee, an employer should consider the implications before providing a positive recommendation – make sure you are comfortable with the recommendation and that the representation is accurate. Another alternative would be to simply confirm former employee’s position, salary and dates of employment.