How to Tactfully (And Legally) Rescind a Job Offer

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Rescinding a job offer is a task no company ever wants to face. It takes months and plenty of resources to find the perfect candidate, but oftentimes, what used to be promising may suddenly no longer be a good fit. There may be many reasons why a job offer has to be withdrawn. Regardless, remaining professional in these situations will help protect the company from legal implications and will also help preserve the relationship with the candidate.

Is It Legal to Rescind a Job Offer?

Any employment proposal can be withdrawn at any time as long as the candidate has not accepted the job offer. If the proposal was conditional by nature, it can be rescinded if the conditions in the offer have not been met satisfactorily. 

These conditions may include:

• Failed drug test
• Failing to provide credentials relevant to the position
• Unable to offer adequate references
• Unable to prove work eligibility in the country
• Unable to pass any requested background checks

Most areas of the United States except Montana follow the “at-will” employment, meaning either party may end the relationship between employer and employee without notice or cause. At-will employment also covers the time between the job offer and the candidate starting the job. This holds as long as the reason for rescission is not unlawful. A reason is deemed unlawful if the hiring company discriminates against the candidate.

If the following aspects have influenced the decision to rescind, then it is considered discriminatory:

• Age
• Gender
• Sexual orientation
• Race and belief
• Relationship status
• Pregnancy and maternity
• Disability

Discriminating against these aspects could become legal grounds for action from the candidate.

Reasons for Withdrawing a Job Offer

In reality, job offer withdrawals are more common than most people think and can happen for various reasons. 

Issues Within the Company

Some reasons for job offer rescission can be company-related. For example, the company may be experiencing organizational restructuring or unforeseen budget cuts. Mistakes such as double-filling a role could be made during the hiring process. Worse, the offer may have even been sent to the wrong person. A survey has shown that companies can rack up to $17,000 in costs for hiring the wrong person. It’s better to withdraw a job proposal than incur losses in the long run because of one bad hiring decision.

Issues Regarding the Candidate

The candidate could also be a determining factor in why a job offer is withdrawn. It could be because of something a hiring manager has discovered about the applicant, such as they provided false information and material during the interview. A negative post-offer experience could also affect the decision, especially if the candidate is deemed unprofessional by being rude to the recruiting staff or delaying and postponing meetings.

In other scenarios, routine checks can surface a criminal record, failed drug tests, or falsified qualifications. When conditional offers are not met, a rescission could be done to protect the company.

Legal Implications of Rescinding an Accepted Job Offer

Although it’s possible to withdraw a job offer, the company could be at risk for legal liabilities or even sued for breach of contract once the candidate has accepted the proposal. This is because once an offer has been accepted, the candidate automatically enjoys the same rights as an employee regardless of whether they have started their first day or received the contract. Note that a verbal proposal and acceptance are as valid as its written counterparts. 

If f a potential employee has suffered damages because of the job offer being withdrawn after they accepted it, they could file claims  for the following:

• Discrimination
• Breach of contract
• Fraud and misrepresentation

A lawsuit may help them get compensation for economic or emotional harm. This is especially true if a candidate quits a lucrative employment to accept the new role. They could also claim relocation costs for moving closer to the new job only to find the position no longer available. 

Each state in the U.S. has different laws regarding an accepted rescinded job offer. In states like New Jersey, employers can be liable for expectation damages under the legal concept of promissory estoppel. Someone can incur losses based on a promise made despite no actual contract.

How to Rescind a Job Offer

So, how do you handle such a delicate situation? While it’s best to avoid such a scenario by adequately vetting candidates, it’s important to navigate the situation tactfully and legally when it arises.

1. Understand the Legal Implications

Before taking any action, it’s crucial to thoroughly understand the legal ramifications of withdrawing a job offer. Sometimes, a proposal can be legally binding, especially if a formal contract or signed agreement is in place.

Many states follow at-will employment, meaning an employer can terminate an offer at any time without cause as long as there is no contract in place or discriminatory motive involved in the decision.

If an offer is extended with specific promises for benefits, salary, or job security — meaning an implied contract was made — withdrawing that offer could be considered a breach of good faith, as in the case of Pugh vs. See’s Candies. In this case, a consultation with legal counsel should be sought before proceeding. Knowing the fine print and seeking legal advice when necessary will protect the company from litigation.

2. Make the Decision Quickly

Once it has been determined that rescinding the job offer is necessary, take swift action. Delaying the withdrawal could lead to unnecessary confusion and inconvenience for the candidate and may reflect poorly on the company’s reputation. This is particularly crucial if the potential employee has resigned from their previous job or made plans to relocate. A delay could drive the stake further and cause severe personal or professional disruption.

Contact the candidate as soon as possible to inform them of the decision. The sooner they know, the easier it will be to recalibrate their plans.

3. Communicate Clearly and Respectfully

Withdrawing a job offer can quickly become emotional for the candidate, so it’s essential to approach the conversation with sensitivity. Be clear and concise when explaining the reason behind the decision.

The key is to keep the conversation professional. Focus on neutral and factual reasons for the decisions without overexplaining or making it feel like the candidate’s fault. Being empathetic is also crucial. Acknowledging their disappointment will reflect positively on the company, and an empathetic message goes a long way in establishing goodwill. If appropriate, offer to stay in touch and express a desire to keep communication lines open. The candidate might be a better fit for potential future opportunities.

4. Provide the Candidate With Alternatives if Possible

If the terminated job offer was caused by internal factors like a funding issue that affects the role of company restructuring, consider presenting the candidate with an alternative. This could include referring them to another department or role, providing them with networking contacts, or suggesting a role with different responsibilities. Giving them a solution during a sensitive time is a good way to show the candidate that the company respects their time and effort.

5. Be Prepared for a Reaction

A rescindment can be a major blow for some candidates. Even with the best intentions, candidates will feel upset, confused, or even angry — all of which are natural reactions. Be prepared for any emotional response that might come up, and handle it professionally as much as possible.

6. Offer a Written Confirmation

After the dreaded conversation is over, follow up with a formal, written letter confirming the withdrawal of the job offer. This letter should reiterate the reason for the rescindment and express gratitude for the candidate’s interest. The written confirmation letter also protects your company from potential legal action, especially in cases where the candidate questions the terms of the proposal.

Navigate Through Job Offer Rescissions Tactfully

Rescinding a job offer is never ideal — it should be avoided as much as possible. However, it can happen, and when it does, it should be handled with utmost professionalism. By understanding the fine legal print, acting immediately, and being empathetic toward the candidate, employers can minimize the negative impact of a job rescindment. Remember that conduct during this process reflects the company’s values and can shape future hiring efforts.