Legally, a former employer can disclose to a prospective employer why you left the company, provided the information is accurate and relevant. Unless the information is confidential or unless you and the company previously agreed on what details would be released, you have no guarantee of what your former supervisor will say and no legal recourse.
No state or federal law governs how much information a former employer provides about you, as long as it’s truthful. Many companies, however, allow managers to reveal only minimal information out of fear of potential defamation lawsuits. Because this policy is so widespread, many applicants mistakenly believe the law mandates it. Even at companies with such a policy, some supervisors reveal considerably more information.
Nearly every employer will disclose basic information such as job titles, dates of employment and salary, with some companies prohibiting supervisors from discussing anything else. If you fudge your job title or salary to make yourself look better, that will likely come out in a reference check and could cost you your chance at the job. Because job titles at some companies are unclear, especially when employees informally take on more advanced roles, you might want to confirm with your supervisor and human resources department what they’ll say if asked about your job title and description.
Employers can disclose any truthful information they see fit regarding how and why you left. For example, your employer can reveal that you missed work too often, were chronically late, lied on your resume, had frequent run-ins with other employees or that you stole office supplies or engaged in other unethical, inappropriate or fraudulent behavior. The employer should only reveal information that it can confirm, however. For example, if an employer claims your work performance was sub-par, the company should have performance reviews or other documentation to verify its allegations.
Employers face some limits in what they can disclose. In California, for example, California Labor Code Section 1050 makes it a misdemeanor for employers to misrepresent former employees and prevent them from obtaining employment. Your personal medical information is also typically off-limits. Under the Americans With Disabilities Act of 1990, employers must keep your medical information in a separate file and keep it confidential. If you signed a separation agreement as part of your departure, that might also limit what your employer can reveal. For example, if you negotiated for it to only provide your job title and dates of employment, the employer's legally bound to keep its word.