Can an Employer Rescind a Job Offer? How to Rescind

Published · 5 min read

The hiring process does not stop when a company asks a job seeker to be on the payroll. Sometimes, some issues pop up after an offer is extended and recruiting for the job needs to start once more. Even the most experienced HR professionals have had to null and void a job offer to a candidate.

Here are just a handful of reasons for rescinding job offers.
● The company’s corporate health is poor and cannot take on another employee
● The business must reorganize its employment structures
● The department’s budget is cut
● The candidate acts inappropriately after the company has already extended an offer of employment
● Rescinded job offer after background check

According to CIO, rescinding job offers increased in commonality during the recession, but it can still come as a surprise to many job seekers. HR professionals must be careful with how they handle withdraw an offer of employment.

Employee management is as important at the end of the talent acquisition process as when new hires officially become part of the organization. HR professionals need to ensure they are following the proper procedures – both the company’s own policies and the state’s – to act appropriately during these situations.

Is it legal to rescind a job offer? Legal reasons employers can withdraw a job offer

HR professionals know they have to walk a fine line when it comes to rescinding job offers, but to rescind an offer of employment letter is considered acceptable in certain circumstances. An article in Ad Week noted that offers are simply offers and are considered to be an offer of employment “at will” in most circumstances. Because of this, it is legal to rescind most job offers.

The Ohio State Bar Association defines “employment at will” to mean “that, unless you agree otherwise with your employer, either you or your employer may terminate the employment relationship at any time for any reason that does not contradict the law.” The Center for Career and Professional Development at Rensselaer Polytechnic Institute, an institute of higher education in New York, noted each state has its own laws regarding the legality of rescinding job offers once they have been accepted, but most courts have accepted the concept of employment at will.

However, an offer of employment is often seen to be an official promise of a job, and this has been used in court by candidates with rescinded job offers to win their cases. Cases have been found in favor of job candidates under the legal doctrine of promissory estoppel, which “supports a harmed party in enforcing such promises made.” A court can also side with the plaintiff if it finds there was a breach of contract because the employment contract was signed by the involved parties.

According to HR news site, HC Online, discrimination and misrepresentation of the company and/or position can also be brought up in court by candidates. The Society for Human Resource Management, or SHRM for short, recommended HR professionals only rescind an offer of employment after legal counsel has looked over the matter.

Can a job offer be rescinded after a salary negotiation?

While salary negotiation is not at all uncommon, it is important to note that if an employer feels as though they cannot accommodate a salary increase, that employer is within his or her rights to rescind the job offer.

However, just because someone tries to negotiate a salary does not mean the job offer should be automatically rescinded either.

To avoid losing a potentially great candidate and addition to your business, it’s important for prospective employers to consider the negotiation, and if more money is not possible, try to see if the candidate can accept the original offer under terms outside compensation, like benefits or growth opportunities.

How to rescind a job offer

It is sometimes acceptable for HR professionals and their employers to rescind job offers. Internal issues like company reorganization and budget cuts can factor into whether the offered job is even available anymore, but HC Online noted external elements, such as if the candidate lied on his or her application, can come into play as well. Even the candidate’s behavior and etiquette can end up impacting whether her or she will still have an offer of employment.

For example, Inc. magazine reported that a journalist wrote on his blog that he received an offer of employment at a newspaper. Although his editor assured him the post was acceptable, he had used the business’s logo without permission and quoted the offer letter, both of which the newspaper said was not allowed. An HR expert noted that the company might be partly at fault in this situation, because it may not have communicated that the newspaper wanted to announce the job offer or that the candidate would be on probation.

For a decreased legal risk regarding whether an employer takes back a job offer, it’s important to observe the following steps:
● Make sure your offer letter states that it is “at- will employment”
● Avoid any contractual language
● Consult with legal counsel before rescinding a job offer

What happens when a worker has already left their previous job?

Yet one of the biggest issues with rescinding job offers is the problem of whether the candidate offered his or her previous employer with a notice of intent to leave his or her job because the job seeker accepted the new job in good faith. There have been court cases regarding this. SHRM noted some had won on the grounds of promissory estoppel, and HC Online pointed out a large banking organization was found liable for a worker quitting his or her former job to work at the company and then having to rescind the offer of employment.

HR professionals must consider the potential of having to rescind an offer of employment letter. U.S. News suggested candidates provide a written acceptance letter and don’t give notice of intent to leave to their current employers until there is confirmation of employment. HR professionals may want to do the following:

● confirm that every background check and HR process has been completed before considering rescinding the offer letter

● ask candidates for a written acceptance letter

● communicate about acceptable behavior during the probation period and recommend they don’t leave their jobs

● communicate with the potential employee not to make any sudden life changes until they have confirmed they are officially starting on the job

● consult with legal counsel before rescinding the offer letter

Why may a job offer be rescinded due to a background check?

A study commissioned by the National Association of Professional Background Screeners (NAPBS) surveyed more than 1,500 HR professionals from November 2016 to February 2017. Their findings indicated that as many as 96% of U.S. employers conduct at least one type of background check, such as credit checks or criminal background checks.

If an employment background check reveals information indicating that the applicant could harm the company financially – or that the applicant could endanger the safety of customers or coworkers, thereby posing a liability – the hiring entity may have cause to rescind the job offer. For example, the company may rescind an offer of employment because a background check reveals issues such as prior criminal convictions, inaccuracies on the applicant’s resume, a history of poor credit, or unfavorable reviews from previous bosses or supervisors. To reiterate, it is in the hiring entity’s best interests to consult with an attorney before formally rescinding a job offer.

How should employers handle & manage rescinded job offers?

Employers should inform the candidate about the rescinded offer as soon as possible to prevent any lingering or potential damage that could happen in that period. Furthermore, employers should explain the reason why the offer was rescinded if legally allowed (i.e. a merger and therefore no need to hire new employees, lack of budget, etc), or offer to help the candidate find a new job somewhere else within the company if possible and depending on the reason for the rescinded employment letter.

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