Q: On what grounds is it appropriate to rescind a job offer? Does it have to be based on something strictly illegal or can an organization rescind an offer based on any personal preferences? We are thinking of rescinding the offer we made based on a candidate’s somewhat unprofessional communication after we extended the offer—but I want to be mindful of any potential repercussions for the company.
A: Companies do rescind job offers for many different reasons. The organization’s financial picture might have changed or they might have been acquired and had to stop all hiring activity. When most companies make offers, they stipulate that it is contingent upon background or drug tests, but other transgressions might also impact the offer. If you found that the candidate’s communication was unprofessional, it’s important to measure what that really means—was it offensive? Does it indicate a lack of ethics or lack of understanding of the culture? Did it display something that, if known earlier, would have prohibited you from making the offer? The best thing to do is consult your lawyer to ensure that your actions are covered by contractual language and won’t result in the employee trying to hold the company responsible for their ending a job search and losing other opportunities.
Attorney David Wilson of the law firm Hirsch Roberts Weinstein indicates that an offer can be rescinded any time before the employee accepts it or, if in an employee-at-will state, if the employer discovers “legitimate, non-discriminatory information that if you had known it before would result in you not making the offer in the first place.” Wilson encourages employers to include specific language in their application forms that allows them to rescind their offer or terminate employment when the employer discovers falsified information, misrepresentations, or omissions, such as:
I certify that all information on this application and any other material provided by me is true and complete. I agree that falsified information, misrepresentations or omissions on this application, or any accompanying resume or other materials will disqualify me from consideration for employment and will be considered justification for dismissal whenever discovered.
Including such language early in the process and consulting your general counsel or another legal resource is your best option to cover any range of issues that might arise in the hiring process.
According to Wilson, an employer can legally choose to rescind an offer for any legitimate non-discriminatory reason, such as the employee showing up two hours late on their first day of work without an excuse. Unprofessional communication could be a similarly legitimate non-discriminatory reason, especially if the employee’s job will involve communicating with customers or the public, says Wilson. Document what the unprofessional behavior was and consult a lawyer to ensure that it meets the qualifications of at-will employment laws.
If you are reluctant to rescind an offer based on something not strictly illegal, consider if the potential employee’s unprofessional behavior is something that can be coached. If it’s something so egregious that it would hurt the image and reputation of the company, rescinding the offer may ultimately be the best course of action. In terms of the impact to the company’s image, depending on the situation, offering severance and outplacement support to someone whose offer was withdrawn may be a wise middle ground. For example, if the business changed significantly before the new hire’s start date—a division is closed or the organization was acquired and a major product line was eliminated—and it had nothing to do with the behavior or qualifications of the employee, the company might offer support, even if the individual never actually had a first day of work.
There are also some situations where it would not be wise to rescind an offer. Perhaps your first choice candidate initially turned the offer down and then came back to accept after you’d offered it to the number two choice. You might technically be able to rescind depending on your state’s laws and company contract language, but something like this might generate a negative reputation for the company among future candidates. Just like organizations don’t want opportunistic or flip-flopping candidates working for them, candidates do not want to work for companies like that, either.
Companies need to be very thoughtful about making offers, because rescinding them is a last action alternative. If you have carefully examined the situation and believe rescinding is the best offer, move forward under the advice of trusted legal counsel and make note of how to avoid the situation in the future.