When a job applicant applies or interviews for a new job the prospective employer would often like to speak to the applicant’s current or former employer. But if the employee is still employed the prospective employer will likely cause the applicant to be fired or terminated by contacting the current employer and informing them the applicant is applying for a new job. A prospective employer interviewing an applicant might also expose itself to liability by contacting the applicant’s current employer—as well as damaging its reputation and ability to attract other qualified job applicants.

But a prospective employer may contact the former employer (or other reference) of an applicant. And the former employer (or reference person) may freely state truthful facts about the applicant—or state the former employer or reference’s opinion of the applicant—but cannot make false or untruthful statements of fact about the applicant. If a former employer or applicant makes false or untruthful statements of fact—statements that are provably false—the former employer or reference may be subject to liability for defamation (slander or libel).

In Montana, as in many states, there is a delicate balance between the rights of job applicants and the interests of prospective employers when it comes to reference checks. Prospective employers must be cautious when contacting an applicant's current employer, as doing so could jeopardize the applicant's current job. Therefore, it is common practice to refrain from contacting a current employer without the explicit consent of the applicant. However, prospective employers are generally allowed to contact an applicant's former employers or other references. When providing information about a former employee, the former employer is expected to be truthful and accurate. If a former employer or reference makes false statements that can be proven untrue, they may be liable for defamation, which includes both slander (spoken defamation) and libel (written defamation). It is important for all parties to be aware of these legal considerations to avoid potential legal consequences.