Overview: In order to limit potential exposure to damages, if an employer determines an employment offer must be withdrawn, the employer should do so as early as possible, preferably before the offer has been accepted. Depending on when the employment offer is rescinded, an employer may be exposed to damages.
For instance, if an applicant has already indicated his or her acceptance to an employment offer, the employer may be subject to a legal claim if the offer is withdrawn. In particular, in some states, if the applicant has accepted the offer and has relied upon the offer to his or her detriment, such as by giving notice to a former employer or by relocating, the employer may be exposed to damages. Therefore, employers should carefully consider this exposure when making the decision to withdraw the offer.
If a job offer is rescinded based on the results of a preemployment screening measure, such as a credit check, reference check, medical exam, or drug test, employers must ensure that the offer is withdrawn in compliance with federal and/or state laws.
However, in all instances, if a job offer is withdrawn employers should not only verbally inform the applicant, but should also notify him or her in writing. That way there is no misunderstanding regarding the status of the offer. If a written employment contract exists, the job offer should be rescinded in accordance with the terms of the contract.
Trends: At least one court has held that employers should carefully consider the advice and opinions of third parties on whether an applicant's disability affects his or her ability to perform a job before withdrawing a conditional job offer. Otherwise, if an employer takes an adverse action based on a third party's general assessment, such as withdrawing an employment offer, it can be exposed to an ADA claim.
Author: Melissa A. Silver, JD, Legal Editor
Updated to reflect forthcoming Philadelphia ordinance prohibiting an employer from asking job applicants about their wage history as a condition of employment.
Updated to reflect conditional employment offer requirements under the City of Los Angeles ban the box ordinance, effective January 22, 2017.
An employer with six or more employees who perform the majority of their work in Portland must provide notice of the specific item of the applicant's history on which its decision is based to withdraw a conditional employment offer.
Updated to reflect employer limitations on obtaining salary history of job candidates in the forthcoming state Act to Establish Pay Equity, which strengthens existing equal pay laws.
Updated to reflect hiring requirements under the Workplace Privacy Act, effective July 20, 2016.
Updated to include employment offer requirements under Portland's ban the box law, effective July 1, 2016.
Enhanced to improve the comprehensiveness, organization and scope of coverage.
Updated to reflect hiring requirements under the forthcoming social media privacy law.
Updated to reflect Austin's ban the box ordinance and its conditional employment offer requirements, effective April 4, 2016.
As mandated by the New York City Commission on Human Rights an employer with four or more employees in New York City must provide notice of its analysis of an applicant's criminal history if it is seeking to withdraw a conditional employment offer.
HR and legal considerations for employers regarding rescinding job offers.