Put this one in the “no good deed goes unpunished” file.

When the University of California, Merced, had to lay off 11 professors due to a budget deficit, department director Robert Ochsner wrote letters of recommendation on behalf of one of the affected professors, Loren Qualls, trying to help him find a new job.  Ochsner stated in his letter that Qualls was not reappointed due to “budgetary reasons” and that his termination “does not reflect a negative judgment of his overall teaching.” The letter added that Qualls “consistently and professionally fulfilled all his responsibilities for teaching,” and mentioned other positive evaluations.

Yet, when the budget crunch passed, the university chose to rehire other professors, but not Qualls, citing longstanding concerns about his teaching skills, lack of organization, and failure to attend meetings or classes on time.  These issues were well-documented.

In response, Qualls sued for race discrimination in federal court in California.  The court recently refused to dismiss Qualls’s claim, noting the stark discrepancy between the stated reasons for not rehiring him and the positive reference letter.  The letter of recommendation, “which a reasonable juror could find to describe Plaintiff as performing his job competently, is inconsistent with the other evidence that Defendants have submitted that tends to show that Plaintiff performed his job poorly, and thus creates a genuine issue for trial,” the court held. Therefore, if a jury were to believe the reference letter to be true, it could find that the claims of poor performance were false and a pretextual cover-up for race discrimination.

The case presents a reminder to employers that job references – positive or negative – continue to create a risk of liability.  Here are some tips and considerations:

• Employers should never give a false reference, as alleged in the Qualls
• Employers can avoid the issue altogether by prohibiting letters of reference, and just providing “neutral” information – dates of employment and position held.
• With regard to positive references – which can serve the laudable goal of helping a good worker find another job – employers face a much lower risk of any claim, if the reference is true and positive, and such references are the exception and not the norm.
• With regard to negative references, the traditional rule of prohibiting such references altogether remains the safest and best route to avoid claims, including defamation.

Michael Homans is a Labor & Employment attorney and founding partner of HomansPeck LLC. For more employment law updates, including news and links to important information pertaining to legal developments that may affect your business, subscribe to Michael’s blog, or follow him on Twitter @EmployLawUpdate.