Many job seekers think there are laws out there restricting what former employers can say about them. A lot of folks may be confusing the word "law" with the word "policy."
Legality or Policy?
While many companies have internal policies that define what employees can and cannot say about current or former employees, those policies fall far short of being laws in any sense. Policies are nothing more than rules generated by the HR department and adopted by a company. They include everything from how many paid vacation days the company offers to rules about attendance and punctuality. But they are not laws that some legislative body external to the company has made to which a criminal penalty has been attached. That is the difference between the rules a company decides to adopt and laws that make it illegal to do things like speed or run stop signs.
For example, numerous job seekers wonder, "What can a former employer legally say about me?" If that question is taken literally, the answer is "anything." I'm not aware of any laws that restrict or bar employers -- or anyone else -- from exercising their First Amendment right to free speech.
That is not to suggest, however, there are no consequences associated with what is said, especially if it's an intentional lie. In other words, freedom of speech is not absolute. The classic example is you can't shout "fire" in a crowded movie theater and claim you're not responsible for any injuries you cause, because you were just exercising your right of free speech.
Similarly, although there are no laws restricting what prospective employers can ask either, there may be legal consequences if a hiring decision is based on the answers. For instance, asking questions about age, race, sex, religion, national origin and so forth, all of which are federally protected categories, isn't unlawful, but it certainly is unlawful to make an employment decision based on the answers to any of these questions. You can ask, but if you act on the answer, there very likely will be negative legal consequences.
The Truth Will Set You Free
What does all this mean? Generally speaking, it means that as long as a former employer offers honestly held opinions about a former employee or states a documented fact about that person, there's not much a former employee can do about it. While it is true that many companies choose to create policies limiting what is said about a former employee to merely confirming job titles and dates of employment, I'm not aware of any legal consequences for saying more, as long as it's the truth. On the other hand, if the company does have a policy that prohibits saying more, you probably won't go to jail for violating it, but you could be fired. And if you intentionally and maliciously lie, you could also be sued.
What This Means for You
From the job seekers' standpoint, this whole issue can be seen as something very much like a double-edged sword. Companies that restrict what can be said by policy may be hurting a good employee's chances of landing another job, because, so the thinking goes, if this candidate did a good job, why wouldn't a former employer be willing to say so? Many prospective employers see no-comment policies as a definite red flag. On the other hand, if a former employer intentionally and maliciously lies about a former employee, the result can be the same -- no job offer. If that's the case, and you think a former employer is intentionally lying about you, call a lawyer.
It's not so much a matter of what a former employer can legally say or not say about you; it's more a question of what the employee has given a former employer to talk about in terms of performance, dedication and contributions.