BLOG

Now and then, your business may need to rescind a job offer. It’s a tough situation, and one that can lead to liabilities and penalties if it’s not done right.

The Society for Human Resource Management (SHRM) recently published an important article on this topic. They explain some of the risks involved with rescinding offers, and how to protect your business if the situation occurs.

Please note, the following is meant to be informative only. It should not be construed as legal advice. Before rescinding an offer, we recommend consulting with legal counsel for specific guidance.

Use Caution When Writing Offer Letters

Sending offer letters is an exciting part of the hiring process. You’re happy to have found someone who seems to be a good fit, and the candidate should be pleased to receive your offer. When writing a letter, it’s easy to forget that employment is not yet guaranteed, but it’s important to ensure your letter does not contain any specific promises or commitments.

Avoid statements that infer the applicant has the assurance of job security. Don’t include anything that suggests the individual is likely to be employed for a specific period of time. You could be taken to court if an offer that appears to provide a guarantee is later invalidated.

Make A Conditional Offer

Offer letters should only be issued after you’ve completed as much of the interviewing and screening process as possible. Some steps might not begin until an initial offer is made, however, such as a background check or drug test. The screening process could uncover issues that show your applicant is ineligible for employment. It’s best to be prepared for that possibility.

When you write an offer letter, SHRM advises it should implicitly state that at-will employment is being proposed. This signifies the offer and subsequent employment may be terminated at any time, as long as it is not done for an illegal reason.

The offer letter should not read like a contract. It should not promise a salary for any specific length of time, or include phrases that create the expectation of long-term employment. Stipulating that the offer is conditional and employment is at-will helps protect your business if it does need to be revoked.

Be Aware Of Potential Liabilities

When you rescind an offer, the applicant may wish to pursue legal action against you. If your letter wasn’t crafted properly, you could end up owing money to someone you did not employ. SHRM pointed out three common claims from candidates who received offer letters but were not hired:

1. An applicant could claim misrepresentation if an offer was revoked due to budget limitations or other issues that were known before the letter was written.
2. An applicant could claim discrimination if they are part of a protected class, based on ethnicity, gender, disabilities and other factors.
3. An applicant could claim breach of contract if the offer letter implies that employment is guaranteed – even with something as simple as: “Excited to have you on board.”

Inform Quickly And Clearly

Should you need to rescind an offer, it’s best to do so as quickly as possible. You may choose to break the news over the phone, but it is also important to provide written notification. Make the letter clear and concise. Consult your legal counsel throughout this difficult part of the process.

It won’t always be possible, but the best time to revoke an offer is before an applicant accepts the position. When you send an offer letter, start the pre-employment background screen and any other remaining steps immediately. If the person is deemed ineligible for hire, be ready to follow up using the federally-mandated adverse action process

The hiring process can be complicated and arduous. Backgrounds Online cannot offer legal advice on matters such as revoking a job offer, but we can guide you through every step of the screening process. If you have questions or need assistance with background checks, then contact us today.