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Rescinding a Job Offer

I was recently volunteering at an employment law legal clinic and a prospective client called in with a question about a job offer. The gentleman was provided with an oral job offer for a new position and was assured by the new company's Human Resources Representative that he had the job. However, about a week later, right as he was about to start the new position, he was informed that he did not meet the educational requirements for the job and the company was rescinding the offer. He was understandably upset and wanted to know if he had any legal recourse.

As a general rule, an employer can rescind a job offer at any time. Job offers are withdrawn for a variety of reasons. Some are external reasons such as the overall economy; some are based on the employee not passing a pre-employment requirement. Similarly, jobseekers should be aware of language in the offer that indicates it is contingent upon something else, whether that is passing a background check, reference check, employment or education check. In this case, the job required a Bachelor's degree.

Further, an offer is simply an offer. Even if you accept the offer, the contract created is for employment at-will, meaning that either party can terminate the relationship at any time. Typically, a contract for at-will employment is not enforceable. However, there may be potential claims of promissory estoppel, breach of contract, fraud, and discrimination available to job candidates if the rescission meets certain criteria.

Promissory estoppel is a legal doctrine that supports a harmed party in enforcing such promises made, even if a written contract did not exist. In providing a prospective employee with a job offer, the employer could be considered to have made a "promise" of a job. If the promise of a job is rescinded, it could cause economic and emotional harm to the candidate. Typically, this claim may be merited depending upon how substantially the prospective employee is hurt by the action taken by the employer for example: changes in child care or school, purchasing transportation, a move to be near the office, purchasing new clothes, selling a home, relocating to another state, and purchasing a new home. When a written employment contract exists and was signed by the parties, breach of contract can be added to the list of claims.

The prospective employee could also have claims for fraud, fraudulent misrepresentation, or negligent misrepresentation. To make this argument, the candidate would have to show that the employer made a false representation, knew it was false, and intended for the applicant to rely on that false information as part of his decision-making process for accepting the position.

Further, the employer may not rescind a job offer based on a discriminatory reason such as the qualified candidates race, background, religion, age, disability, or gender. If an employer rescinded a job offer based on any of these categories and hired a person outside of the protected categories, the rescission may be illegal. Since educational level is not a protected class, an employer is legally allowed to make decisions regarding employment based upon the educational background of the prospective employee. In Colorado, felony and misdemeanor convictions may be considered by the employer, only to the extent to which they relate to the applicant's suitability to perform the job for which she applied. For example, if you were applying to be a bank teller, and your background check reveals you had a recent theft conviction; the employer could decide they do not want to hire you. However, if you are applying to work as an office manager and the employer decides not to hire you because you have a DUI conviction; the employer would have a harder time showing that they had a valid reason for the decision.

If the offer was withdrawn based on the candidate's failure to pass a background check and/or credit check, the candidate might also have a claim, depending on what was found on the report, how recently the incident occurred and how that incident relates to the job.

A prospective employee can protect themselves by asking the job offer letter to reflect what the company will do if the job offer is withdrawn. For example, if there is a signing bonus or an advance, ask the company what will happen to those items if the offer is rescinded. Further, be sure the offer of employment is firm before making any changes to your life which could negatively affect you if the offer is rescinded before the job begins.

If you have a question about a job offer which was later rescinded, contact an attorney to discuss your legal rights.

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