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One of the most common reasons for having to withdraw a job oer—and
one of the most avoidable—is the discovery of additional information that
changes your assessment of the candidate’s suitability for the position. This can
occur when the results of a reference or credit check is unacceptable or when a
candidate refuses consent to a drug test or sign a noncompete agreement, for
example. By stating on your employment application and in your oer letter
that the job oer is contingent on the successful completion of these tests and
inquiries, you put the candidate on notice that the oer will be withdrawn if
the results are unacceptable.
Another common reason for withdrawing an oer is a change in business
plans that results in the decision not to ll the position. This may be the result
of a nancial downturn, lower demand for the company’s goods and services,
or a change in upper management, for example. The company should be
able to justify the withdrawal of the oer on the basis of a change in business
conditions.
While it is generally legal to withdraw job oers, it is important to pay close
attention to the specic reason for the withdrawal and how the process is
carried out. A candidate whose job oer has been rescinded may sue the
employer on a number of legal theories. The most common are:
1. Promissory estoppel. The candidate made important changes in his
life in reliance on the oer extended by the employer. He may have quit
another job, relocated, or taken other steps to transition to the new job.
When the job oer is rescinded the candidate is left in a worse position
that he was before he received the job oer because he has no job,
home, etc. He may sue the employer to recover his damages incurred in
reliance on the rescinded oer.
2. Fraud. The candidate must show the company knowingly made a
false representation and intended for the candidate to rely on the
misrepresentation. The candidate may sue to recoup damages incurred
by relying on the misrepresentation. For example, an employee submits
his letter of resignation to take another job, but his current employer
makes a counteroer that includes a promotion and large raise. After the
employee turns down the job oer in reliance on the current employer’s
counteroer, the current employer refuses to implement the promised
raise and promotion.
Today, most organizations are
experiencing change, both positive
and negative. Some organizations
are making strategic changes
in their product lines, corporate
directions, or operations.
Most employers nd that from time
to time they are faced with the
need to withdraw a job oer that
has been made to and accepted
by a candidate. Rescinding a job
oer can be an uncomfortable
experience for all involved and can
expose the employer to signicant
legal risk. Therefore, it is wise to
take steps to reduce the likelihood
of having to do so and to do it
right when rescinding an oer is
absolutely necessary.
Rescinding a Job Offer
Can Be Done Carefully
Complimentary Guide
800.488.4845 www.mranet.org
Wisconsin
Minnesota
Illinois Iowa
Here is some sample verbiage to
assist you:
On [Date] you received a job
oer for employment with [XYZ
Company] as a [Position Title]. As
stated in your oer letter, your
employment was contingent
upon successfully passing a
reference check. During our
hiring process, we were unable to
substantiate information you had
provided regarding your previous
employment. This letter, therefore,
serves as formal written notication
that your contingent oer of
employment with [XYZ Company]
has been withdrawn.
On rare occasions most employers
need to withdraw a job oer. Doing
so promptly and compassionately
will help to reduce your risk of
liability.
MRA’s HR Hotline can help you!
866-HR-Hotline | 866.474.6854
mranet.org/24-7/hr-hotline
3. Breach of contract. The candidate construes the job oer to be an
employment contract. Withdrawal of the oer constitutes breach of the
contract.
4. Discrimination. The candidate perceives the job oer was withdrawn for
a discriminatory reason under state or federal fair employment laws.
Consider these suggestions if you nd it necessary to withdraw a job oer to a
candidate:
• Inform applicants that a job oer may be withdrawn if certain
contingencies are not met. Spell out those contingencies in your
employment application and oer letter. Making the contingencies clear
makes it less awkward to withdraw the oer and provides a defense to the
employer in the event the candidate sues over the withdrawal of the oer.
• Do not allow a candidate to begin work (thereby becoming an
employee) before completing the activities that have been designated as
contingencies. It is much less risky to withdraw an oer of employment
when adverse information (i.e. a positive drug test or bad reference) is
received than it is to terminate an employee.
• Check your oer letter to make sure it states that employment is at will.
• Ensure you are “in the loop” with company communication so that you are
aware when business conditions may warrant changes in hiring plans.
• Act quickly to notify the candidate when you become aware that an oer
must be withdrawn so that his losses are minimized. Rescind the oer
in a straightforward manner, providing the legitimate reasons for the
withdrawal.
This sample document is only an example and is based on the laws in eect at the
time it was written. MRA-The Management Association, Inc. does not make any
representations or warranties regarding the appropriateness or prudence of using
this information for any particular individual or situation. Your company should add,
delete, or modify the content of this document as needed to suit your purposes. This
material is for your information only and should not be construed as legal advice. In
some circumstances it may be advisable to have legal counsel review nal documents
prior to implementation. © MRA – The Management Association, Inc.
Wisconsin
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