Overview: In order to limit potential exposure to damages, if an employer determines an employment offer must be withdrawn, the employer should do so as early as possible, preferably before the offer has been accepted. Depending on when the employment offer is rescinded, an employer may be exposed to damages.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indicated his or her acceptance to an employment offer, the employer may be subject to a legal claim if the offer is withdrawn.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If a job offer is rescinded based on the results of a preemployment screening measure, such as a credit check, reference check, medical exam, or drug test, employers must ensure that the offer is withdrawn in compliance with federal and/or state laws.
However, in all instances, if a job offer is withdrawn employers should not only verbally inform the applicant, but should also notify him or her in writing.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 If a written employment contract exists, the job offer should be rescinded in accordance with the terms of the contract.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: If an employer plans to withdraw an employment offer due to an employee's criminal history, employers need to be aware of any state or local law that has any specified notice requirement. For instance, if a covered New York City employer wants to withdraw an offer it must provide a written copy of the inquiry to the applicant, a copy of its analysis that supports the basis for the withdrawal and allow the applicant a reasonable period of time to respond. California passed similar legislation that requires employers to provide notice and allow the applicant to establish that the record is factually inaccurate.
Author: Melissa A. Silver, JD, Legal Editor
Updated to reflect salary history restrictions, effective October 6, 2017.
Updated to reflect amendment to Illinois Human Rights Act regarding religious accommodation, effective August 11, 2017.
Updated to include amendment regarding social media accounts of prospective and current employees, effective July 31, 2017.
Updated to include offer requirements under the Seattle Secure Scheduling Ordinance, effective July 1, 2017.
Updated to reflect hair testing law, effective July 1, 2017.
Updated to reflect forthcoming law regarding salary history inquiries.
Updated to reflect amendments to criminal screening law, effective May 26, 2017.
HR and legal considerations for employers regarding rescinding job offers.