When Can a Company Rescind a Job Offer?

After you are through with the hiring process, landed the new position, received a formal employment letter, and accepted it, things can still go sideways.

Sometimes, the hiring manager decides to cancel an offer for a job position after going through the interview process with the candidate. And it can happen before the prospective employee accepts the offer or after they have accepted it.

This article will discuss the circumstances when a company can rescind a job offer letter. Any potential candidate waiting for a confirmation on their offer letter should read this article to save themselves from any potential risks in terms of job offer rescission context.

Can an Employer Rescind a Job Offer Legally?

Yes, a job offer rescinded by a new employer may align with all legal aspects. And yet, there can be situations where a new employer crosses legal restrictions and is forced to face the consequences. 

Reasons Employer Can Rescind a Job Offer

To understand why an employer rescinds a job offer, here are some of the legitimate reasons behind such a decision:

  • If the employers’ financial status changes and drops to a significant low, causing it to cut off on any expenditure or even declare bankruptcy. In such a situation, any offers floated to the job applicants will have to be withdrawn, and any future hirings will be put on hold. 
  • Organizations going through a structural change or redoing upcoming project-related plans could cause job offers to be rescinded for the project. For instance, if a new project requires hiring interns but budget cuts are made, and offers sent to job applicants must be rescinded.
  • If the hired new employees become unreachable for formalities after the offer letter has been sent, the hiring company has all rights to rescind the offer. Moreover, if the hired employee requests a change in the contract after receiving the employment offer, the employer has the right to cancel the employment letter.
  • A background check can also cause employers to rescind job offers. If an employee’s background check or police verification turns out negative or the information shared in the application is found to be incorrect, the employers can rescind the job offer.
  • Several companies request a drug test before getting a person onboard. However, the employer or HR manager can rescind the offer in case of a failed drug test.

If a job offer is rescinded, there are fewer cases where people have sued the company, yet it has happened. The potential employee’s reasons for suing the company can vary from emotional trauma and economic harm to mental harassment.

Reasons a Job Offer Should Not Be Withdrawn

You must wait before rejecting or withdrawing your name from a job offer as a potential employee. However, you must ensure that the information shared in the application aligns with the company requirements. 

Also, it may become difficult to withdraw a job offer after accepting a job offer if you have already resigned from your current job, made plans to move out of your current residence, sold the house, or paid for moving expenses.

Hence, you must be sure whether the job offer is worth the plans, then decide.

Moreover, the employer may rescind your job offer on discriminatory terms while formally giving false reasons. In such cases, you have the right to ask for legal protection and can get the offer back with the correct employment terms.

How to Handle a Withdrawn Job Offer

If the job offer is withdrawn from the employer’s end, as a prospective employee for the job, you have the right to take legal actions if the reasons have no basis or are discriminatory. 

Also, some US state laws confirm that even if an employer makes valid reasons, you still have the chance to sue them for damages you have incurred due to the job offer being withdrawn. 

As per the national law review, you can content promissory estoppel to recover against a rescinded offer if the other party made a promise and considered such reliance. 

The only national law review would require the prospective employee in question to show proof of the definite and substantial detriment, such as relocation expenses, lost income, etc., to contest promissory estoppel.

Anyway, the legal aspects of any such case must be discussed with a law firm or a legal counselor in your state. It would be best if you reach out to a lawyer for such advice to help get the necessary compensation. 

Minimizing the Chance Your Offer Will Be Withdrawn

Even though you may try making all possible efforts to land a job, there can be several ways an employer might decide to withdraw the job offer.

Below are some pointers to help an employee minimize the risk involved in such a situation:

Be Honest and Forthright

Make sure you are straightforward and honest on your resume, and remember to fill out the correct details in your application. If you keep everything clear, you do not have to worry about the employer finding out any details later.

Also, if asked any questions during the interview, answer honestly, even if it includes a criminal background check or financial issues.

Know Your Rights

Even though employers can run background checks on potential job applicants, there are certain restrictions per the Fair Credit Reporting Act.

You should know that under the Fair Credit Reporting Act, the company cannot use background checks to find out information relating to your personal information or use the checks to discriminate in any way.

Personal information, including the job applicants’ race, sex, religion, national origin, genetic information, disability, or age, are what the company cannot use against you for employment.

Moreover, several states restrict the questions asked by employers during the first few rounds or the initial offer, including criminal history.

Hence, if you encounter such discrimination during employment screening, you should know that you have the right to take legal action against the company.

Consider Getting It in Writing

The best way to avoid difficulties if the company rescinds the job offer is to ask for the clause added to the written job offer. If the company states the possibility of rescinding the job offer, you should consider accepting the employment agreement. 

Also, ensure the letter reads what happens to you in case the company has rescinded job offer for employment. It should include the signing bonuses given before the joining and any advance or relocation expenses incurred by the employer.

Any company ready to make a clear and definite promise and give this information in writing would not discriminate and withdraw your job offer on any other basis.

Suppose the company has rescinded offers in the past, and now the employer is not ready to make a promise by adding a clause for rescinding offer letters in your employment offer. In that case, you might want to reconsider accepting the offer.

Make Sure You’re Comfortable with the Offer and the Company

Although promising, reputed employers would not rescind a job offer without organizational issues, an employee should ask around before accepting the employment at will.

You must be sure that the job offer aligns with your requirement and offers everything you want. The same goes for the organization and its culture. 

You can always ask around about the organization’s outlook toward its employees. Be careful before accepting and moving with at-will employment if you find any negative information that puts you off.

Have a Backup Plan

When you move from one job to another, the risk is involved. It can be something you find out after joining the new company or something that comes out after you have accepted the offer but is rescinded by the company.

Hence, it is always a good idea to have a backup plan when applying for a new job. An employee could avert a possible risk by applying for multiple jobs in the same field or that offer the exact profile. 

This way, if you have more than one job offer and one of them seems shady, you can always go for the other one. As an employee, if you had a good reputation in your previous company, you could also ask your old job back if it seems the best option compared to the other offers.

So, always remember to have a Plan B ready to help you get out of a messy situation and allow you to have the best professional future. There can never be too many job offer letters to help a spurned employee choose the best new job offers for themselves.

Leave a Comment