Can a company divulge the details of a performance improvement plan to another company verifying a candidate’s (assuming the candidate was put into a performance improvement plan by his former employer) employment history?
Can a company? Sure! (Keep in mind that I am not a lawyer, this is not legal advice, and I have no knowledge of your actual location, so this may not apply to you at all.)
People have this strange idea that companies are a. only allowed to verify titles/dates/salaries or b. forbidden from giving bad reviews. This is false.
Now, if you follow the official rule book and your reference seeker calls HR (or an HR service center, which large companies frequently use) and asks for a reference, HR will give (or verify, depending on the company) title and dates of employment–maybe salary info if you are super-de-duper lucky. Most companies aren’t going to authorize an official reference to include anything else. I suspect there may be some companies which will say if it was a voluntary or involuntary term as well.
However, someone who is actually doing a reference check and not merely verifying employment is going to ignore that 800 number and call someone you actually worked for.
This person may have company rules which dictate what he can/cannot say, but that’s not to say he won’t open his mouth and tell the truth about your performance plan.
And yes, your boss could get in trouble from his boss for doing this, but unless it goes into the level of libel, it’s not illegal. Truth is still a defense against libel and a performance improvement plan (PIP) is an excellent way to prove truth. Whether or not the PIP itself was an accurate depiction of your performance is probably (hedging my answer here, as I am not a lawyer) irrelevant. Why? Because it is easily provable that you were on a PIP.
So, I suspect this isn’t just an academic inquiry. If you are on one, you really, honestly, truly, need to work your tail end off to get off the PIP. You also need to go HERE RIGHT NOW and read Alison Green’s (Ask A Manager) excellent column on what to do when you are about to get fired.
If it reaches the point of firing, it’s important that you find out exactly what your boss will say about you if he is called for a reference. And don’t think that if you don’t put him down as a reference on a resume that he won’t get called. Good recruiters are likely to call anyway.
For more on performance reviews:
Why a Formal Performance Review is Unnecessary.