Is it unprofessional/ legal to tell a candidate that they will not be receiving an offer based on the reference check?
Our candidate went on 3 interviews and the client then asked her for references. She gave our client three names. The client said she checked them and wanted to make an offer. I told the candidate that they wanted to make an offer. The client and I start discussing start date, etc. In the meantime, the candidate sent over a fourth reference to the client separately. This reference apparently did not give the candidate a raving review. Therefore, they will not be moving forward with an offer based on a bad reference. What do we do now?
Surely if the candidate was told they would be making a decision subsequent to his/her references, and an offer is not forthcoming, they are going to assume the reference was the reason. You ask if it is unprofessional to tell them, let's first talk about what is LEGAL, since that has potential repercussions for you.
A candidate has the right to know what was said about them, and can request that in writing. They cannot demand to know who said what, as that confidentiality is protected. In your case, you didn't do the references, and therefore you can both professionally, legally, and morally say, "I was told, after they checked your references, that they are not pursuing your candidacy. I can't tell you any more than that. There may be another candidate, there may be a change in the position. The point is we should move on. Certainly, if you are in this situation again, I would make sure you get emailed reference testimonials so that you can be sure your references present you as you thought they would, and if not, you can make other choices with other people".
That should send a clear message. If they ask your company to see the results of those reference checks, it is out of your hands.
Now, let's get back to closing basics with references. You should have:
1. Resisted letting the company do the references. You gave up control and paid a high price.
2. You should have done them as well, even if the company insisted, so you could rebut on your candidate's behalf.
3. You had 3 good references and one bad, and you don't tell me what the bad reference said. But unless it was that the candidate embezzled or harassed or worse, played The Jonas Brothers at his desk, you should have been able to win the day since the preponderance of evidence was that he/she was a quality person.
This, on the surface, is the classic, "isn't there someone in your worklife, Mr. Client, who might say something bad about you or have an axe to grind that is personal? Shouldn't we give this candidate's 3 good references the benefit of the doubt?"
You were not engaged enough in this close and too passive about its outcome. References are not just Validation Services, they are a Persuasion Tool.