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Can an employer be sued for rescinding a job offer?

On Behalf of | Jun 9, 2022 | Employment Law Defense |

You’ve found the perfect person for the position you’ve been trying to fill. The references they provide check out, and their former managers give them glowing reviews. You send them an offer letter, and they sign it.

Then something happens. Maybe you realize that your budget for the next year just won’t accommodate another employee with all the cutbacks you have to make. Perhaps someone in your company finds an even more highly qualified person for the job.

The problem could be with your applicant. Maybe you jumped the gun and made the offer before you got the reference, background or credit check results, and there’s something concerning there. Maybe they didn’t pass the drug test.

Can you legally rescind your offer – especially if the reason has nothing to do with the applicant? Is that offer letter binding? Are you risking a lawsuit?

Could the candidate claim discrimination?

In most cases, you can rescind an offer unless you already signed an employee to a contract. That doesn’t mean the candidate won’t consider taking legal action. However, without a contract, they wouldn’t have valid grounds unless they had reason to believe it was because you learned they were part of a group that’s protected from employment discrimination under the law.

Say you interviewed a person via Zoom, and when they decided to drop off their signed offer letter in person, you saw they were in a wheelchair. Rescinding an offer afterwards (even if it had nothing to do with that) could look problematic. That doesn’t mean you can’t do it. However, be prepared to provide evidence of your reason(s) for revoking the offer.

Preventing problems before they start

You can minimize your chances of having to deal with a disgruntled candidate (whom you may actually want to hire later) by doing all of your due diligence on them before making an offer. If you’re eager to make them an offer before another company snaps them up, include the necessary caveats in your offer letter – such as stating that the offer is pending results of all reference and background checks and any drug or other testing that’s required.

Having legal guidance as you draft your offer letters and contracts – as well as throughout the hiring process – can help you avoid expensive and time-consuming litigation down the road.