Honesty is a Defensible Policy: Reference Checks

16.5.17

The Ontario Superior Court recently confirmed in Papp v. Stokes et al., 2017 ONSC 2357 that an employer will not be held liable for defamation when it provides a truthful reference about a former employee. It is, however, important to note that:

  • an employer should be careful to ensure that the information provided is accurate and must not act with malice in providing a reference, which includes acting with a reckless disregard for the truth; and 
  • while not addressed in this particular decision, employers in some Canadian jurisdictions, including private-sector organizations in British Columbia, must ensure that they have consent before disclosing any personal information about a former employee under privacy legislation.

Facts

Mr. Papp was employed by Stokes Economic Consulting Inc. (“Stokes Consulting”) from 2011 until 2013 when his employment was terminated without cause. Shortly after he was dismissed, Mr. Papp emailed Dr. Ernest Stokes, the president and secretary/treasurer of Stokes Consulting, to ask if he would provide a reference. He provided Dr. Stokes with a list of the type of work that he had done at Stokes Consulting and asked Dr. Stokes to let him know if he had any comments. Dr. Stokes replied “[t]hat is okay” by email.

In the summer of 2014, the Government of Yukon advised Mr. Papp that he was their first-ranked candidate for a position for which he had applied. The only remaining step was a reference check. Mr. Papp sent an email to Dr. Stokes in which he told Dr. Stokes that he was the first-ranked candidate for a position and that Dr. Stokes would be contacted as a reference. Dr. Stokes did not reply to that email.

When Dr. Stokes was ultimately contacted by the Government of Yukon, he stated, among other things, that Stokes Consulting was not pleased with the quality of Mr. Papp’s work and that Mr. Papp did not get along well with others. He also stated that Stokes Consulting would not rehire Mr. Papp. On the same day, the Government of Yukon contacted Mr. Papp to advise him that he would not be offered a position.

Mr. Papp brought an action seeking, among other things, damages for defamation.

Judgment

Justice Miller concluded that there was no issue that the words spoken by Dr. Stokes were defamatory. A plaintiff is only required to prove three things in order to establish defamation: (a) the impugned words were defamatory, in the sense that they would tend to lower the plaintiff’s reputation in the eyes of a reasonable person; (b) the words referred to the plaintiff; and (c) the words were published, meaning that they were communicated to at least one person other than the plaintiff. After these elements are established on a balance of probabilities, damages are presumed. The issue ultimately became whether Dr. Stokes and Stokes Consulting could advance a defence in order to escape liability.

Defences to defamation include both justification and qualified privilege. The defence of justification places an onus on the defendant to establish, on a balance of probabilities, that the statements in question were true in substance and in fact. The defence of qualified privilege attaches to a reference, among other things, unless the defendant acted with malice.

Justice Miller found that, on a balance of probabilities, the evidence established that Dr. Stokes’ statements to the Government of Yukon were substantially true. He also held that, in any event, the defence of qualified privilege also applied. The words of Dr. Stokes were “published” in the context of a reference check and Justice Miller was not satisfied, on a balance of probabilities, that Dr. Stokes acted with malice. Altogether, Dr. Stokes had a complete defence to defamation.

Mr. Papp was ultimately awarded damages for four months’ reasonable notice less amounts already paid to him by Stokes Consulting.