This is adapted from an article by the Allison & Taylor Reference Checking Co.
Myth No. 1: Employers aren't allowed to say anything negative about a former employee.
Reality: While many employers have such a policy, people violate it every day. Half of our (Allison & Taylor's) clients receive a bad reference despite a strict policy.
Myth No. 2: Most employers direct reference checks to their human resources department, and those people won’t say anything bad about me.
Reality: Most HR people will follow proper protocol, but in addition to what is said, reference checkers often evaluate how something is said, notably tone of voice.
Myth No. 3: If I had issues with my former boss, I can simply leave him or her off my reference list and nobody will know.
Reality: Many employers check references that are not on your list, often without your even knowing. They conduct a “social security check” to determine where you have worked and then call the human resources department or office administrator at each employer for a reference. That practice is also used to see if a prospective employee has left any places of employment off the resume.
Myth No. 4: I sued my former employer and now they're not allowed to say anything.
Reality: They may not be able to say anything definitive but there are subtle ways to take a shot at you. There have been many instances in which a former boss or HR staffer has said something like, “Hold on a minute while I get the legal file to see what I am allowed to say about Mr. Smith.” Many employers may be uncomfortable hiring someone who has a legal history.