How Do I Rescind a Job Offer Letter?

A lot can happen in the time period between interviewing a prospective employee and their first day on the job. What if they don’t pass their background check? Will you have to start the interview process over again from the beginning? 

When issues do arise, questions can add up, making the way forward unclear. Here are some answers to frequently asked questions about rescinding a job offer. 

There are two types of formal job offers. A written offer or a verbal offer may be used to inform the candidate of your desire to employ them. If you must rescind a job offer, each scenario must be handled with extreme care. 

Rescinding a written job offer  

The best way to avoid too much exposure to possible legal action is to offer the position with a formal letter and use caution with the wording, being careful not to imply that an offer is a contract. 

However, if you’ve already sent a formal letter and now need to rescind the offer, here are some things to remember: 

1. If the candidate has not yet accepted the offer, you are at free will to rescind the offer or change any part of the offer. Also, if the candidate has sent a counteroffer, the original offer is non-binding and considered rejected. 
2. If the candidate has already accepted, it is best to consult legal counsel before rescinding a job offer. In most cases, it will be acceptable to rescind the offer. Some possible circumstances include if the candidate fails a background check, the company’s financial situation changes, or inappropriate conduct by the candidate comes to light during the period prior to the start date. 

Rescinding a verbal job offer

1. The difference with rescinding a verbal offer of employment as opposed to a written offer is that the candidate will have a more difficult time presenting evidence about what was said. While this might seem like a relief, the employer is likely in the same boat, with little solid ground to stand on. If the situation arises and the matter ends up in court, a judge would likely look carefully at the time period and amount of notice given to the employee between when the offer is made and when it was rescinded. 
2. The best practice when rescinding a verbal offer of employment is to be even more diligent in delivering the bad news in a timely manner. If you are rescinding a verbal offer of employment, your actions and conduct may be looked at more closely than when you have a carefully worded written offer to present. 

The legal implications of rescinding a job offer can include being forced to reimburse the candidate for expenses incurred while accepting the position. This could be wages or bonuses lost from their former employer upon resignation, moving expenses, and even damages due to the loss of seniority should they be able to return to their old job. 

Rescinding an offer of employment isn’t pleasant and if you must do so, it’s important to remember to be both timely and tactful. Make sure that all job offers state clearly that employment is contingent upon a passing a background check, a drug test, and everything else included in the hiring and onboarding processes. And if you must rescind a job offer, do so as quickly as possible. 

This article is intended only for informational purposes. It is not a substitute for legal consultation. While we attempt to keep the information covered timely and accurate, laws and regulations are subject to change.