How dangerous is truth in employment references?

For many years the amount of information flowing in employment references diminished in reaction to threats of legal action caused by a growing number of laws protecting individual rights. The result was that many organizations would share little or no reference information. In recent years, however, a new threat has arisen: the spectre of legal action for negligent hiring stemming from an organization's failure to fully check job candidates' backgrounds. Therefore, a sensible and responsible approach to reference checking is needed, applying to both requesting and dispensing information, in which information that flows is based on job performance and compliance with policy and is objective, verifiable, and furnished without malice or bias.