An employee is leaving and asks for a letter of reference. The employer, wanting to help out the departing employee, agrees to provide one. What can go wrong? Can’t this good deed go unpunished? Actually, you should be fine, as long as you:

• Don’t portray your benchwarmers as superstars. It’s one thing to want to help someone move on. But if you blatantly misrepresent their skils, and they cause damage to the company that hires them, that company can sue you. You made a factual mistatement about this person’s abilities, you knew or should have known that the statement was false, the recipient relied to their detriment, and they suffered damage. That’s what we call fraud.
• Don’t give your former employees evidence of pretext. A central issue in most wrongful termination cases is whether the employer had a legitimate basis for the decision. If you tell someone you’re terminating them for performance problems, then give them a letter that says how great they are, you’ve raised serious doubts about whether you’re being truthful about your motives. You might as well save everyone some time and write “Plaintiff’s Exhibit #1” at the top of the letter.
• Follow your policies. I bet you weren’t expecting an employment defense attorney to say “follow your policies.” That would be like me saying to document performance deficiencies. Crazy, I know. But if your policy says you just provide dates of employment and position last held, either follow it or change it. Don’t put your company in the awkward position of having to explain why it’s following its policy for some employees and not others.

Letters of recommendation aren’t inherently bad. As I’ve said before, I think that most employers should be more forthcoming about the reasons for their decisions. But to avoid problems, the letters need to be honest, accurate, and consistent with company policies.