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Job offer rescinded after I quit my old job

In the July 3, 2018 Ask The Headhunter Newsletter a reader’s new job offer is rescinded after he quits his old job. Does he have legal recourse?

Question

rescindedI was given an official job offer. The letter stated that if I met the conditions of the job offer (and it listed the conditions) that the offer would be finalized.

I completed the conditions and the local hiring manager scheduled my start date. I put in two weeks’ notice at my old job. Two days before my start date, they revoked my offer, stating that I was not “rehireable.” (I worked for a company owned by this company almost 10 years ago, but I disclosed that on my application.) 

They said that the company is an “at will” employer so they didn’t have to honor anything stated in the job-offer letter. Do I have any legal recourse? I have no job at all now. Thank you.

Nick’s Reply

I’m very sorry to hear this. Such stories about rescinded (or revoked) job offers are too common nowadays. I recounted a particularly nasty one in my PBS NewsHour column, Are disappearing job offers a new trend?, and we’ve discussed this problem before. But it’s such a tragic trend that we need to keep talking about it.

You should seek counsel from a good lawyer that specializes in employment law. However, I’ll give you my thoughts with the proviso that this is of course not legal advice.

If you work in an “at-will” state, the employer may be able to fire you for any reason or no reason at any time. What that implies — though you should check with a lawyer about your specific case — is that they could complete the hire and fire you the same day. So you see the problem.

Now let’s go back to what you stated: You were given a official conditional job offer. While I give you credit for making sure you had the offer in writing, the word “conditional” is key. That left the door open for them to not make the hire after all. Here’s where it may get complicated legally, and why you may need a lawyer.

Did you meet the conditions?

You believe you met all the conditions to lift the contingency, but apparently they don’t agree — or they don’t care. What you should have done before quitting your old job was to get a written confirmation from the new employer that you had in fact met the conditions. This could be very helpful if you litigate the matter.

I can’t emphasize this enough: Never quit your job unless you are absolutely sure the new job is locked up. Please see Protect yourself from exploding job offers.

Of course, in an at-will state this may be a moot point. But it’s up to you to take all reasonable precautions to protect yourself.

Did the hiring manager’s actions suggest you met the conditions?

The hiring manager scheduled your start date, which seems to imply he agrees you met the necessary conditions. A good lawyer might be able to do something with that.

Did the employer know you were going to quit another job?

Additionally, there’s the matter of whether you will now suffer because the promise of a job was broken — and whether that hiring manager knew you would be hurt by his action because his offer prompted you to quit another job. Retired employment attorney Lawrence Barty explains it like this:

“A person who reasonably acts in reliance upon a promise and then suffers detrimentally because the promise is broken has a cause of action called Promissory Estoppel. The Promiser is ‘estopped’ from rescinding the promise if the Promiser knew or had reason to know that the Promisee would rely upon the promise to the Promisee’s detriment.”

That is, if you informed the new employer that you were going to quit your old job and lose your income because you were relying on their job offer, then an attorney may be able to make a case for you. Barty goes on to say:

“The Promisee in such a case, once the proof has been accepted, is entitled to be made whole. For example, if A quits his job and then is left without work for a period until he finds comparable employment, A is entitled to Reliance Damages in an amount equal to the lost wages and benefits.”

Rescinded offers are reprehensible

Too often, job seekers are so thrilled at a new job offer that they make assumptions and move too quickly. That’s understandable. But when the potential consequences of making a mistake are huge — and losing your income is a huge risk — then it’s time to slow down and be extra careful about actions you take, like quitting your old job. (This is such an important topic that I wrote a whole book about it. Here’s an article that discusses some of the main ideas: Parting Company: How to leave your job.)

The critical tip-off in your story is in your first sentence: The offer was conditional. But please don’t misunderstand my position on this. While you bear some responsibility, employers who rescind offers so cavalierly are irresponsible. The tip-off about this employer was in what they said to you: “They said… they didn’t have to honor anything stated in the job-offer letter.” While the company’s lawyers might be able to argue it did nothing illegal, its behavior is unacceptable and reprehensible.

While the doctrine caveat emptor certainly holds here, a good employer nonetheless owes a job applicant a big, loud caution about not quitting their old job until a new job is certain. Did you owe yourself a more cautious attitude until it was all finalized? Based on what you’ve shared, I think you acted prudently. My advice to others: Don’t rush into a big decision (like quitting your job) without carefully assessing the risks.

Get legal advice

As you can see, it’s complicated and that’s why a qualified attorney is your best bet. I’m sure you’d rather not spend money on a lawyer, but I think the price of an initial consultation is well worth it since we’re talking about the loss of your salary. I’d talk to a lawyer immediately. Even if this does not turn into a court case, a stern nastygram from a potent lawyer could result in a cash settlement from the employer.

A word to HR managers

Rescinding a job offer is a really lousy thing to do, and explaining it away by citing your freedom to fire “at will” is cheesy. If your integrity and your company’s reputation matter to you, please read the section “Stop rescinding offers” in the article HR Managers: Do your job, or get out. If you work in HR, we’d love to hear your side of this problem.

Have you ever had a job offer rescinded? Did you quit your old job for a new job, only to wind up on the street? What did you do about it? How would you advise this reader?

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31 Comments
  1. My current company extended an offer, THEN they initiated a background check. During that time, they instructed me to not quit my current job.

    The one dicey part is they needed to do a reference check with my then current job. Fortunately the person who did HR there is also a close personal friend who is discreet. By the time I talked to my boss (the CEO) to submit my resignation he was caught completely off guard. I gave the usual 2 weeks, and I turned down the counter offer. (It was a reactive counter offer.)

    So here I am over two years later doing well in my new job. Other companies try to court me, but thus far they cannot beat the benefits I have.

    PS: A small local company contacted me yesterday – while the work looks interesting, they have very negative reviews. I will probably not proceed any further. Their benefits are not great anyway.

  2. The devil in the details is what is meant by “completed the conditions.”

    Merely submitting information for the background check, submitting to the drug test, or providing references/work history is not enough. You must get verification that the employer received and accepted the results. It’s “pass a drug test” not “take a drug test.” Likewise, simply disclosing your previous employers on an application is not the same as some type of work history verification.

    I’ve accepted offers like this before, and I never put in my notice until I hear back from the employer that they got all the results and everything was ok. It’s best to get *that* in writing or an email.

    • Again and again I get similar stories — where the employer insists that the “new hire” attend new-employee orientation. Before the hire is completed. While the background check is in process.

      What’s happening here is that the employer doesn’t want to spend $$ on the background check until the offer is accepted, then wants to speed up the on-boarding process — “Just in case it all works out!”

  3. This happened to me at the end of last year. The two companies had a handshake agreement not to hire from each other (which obviously I didn’t know about, they’re not competitors), and it all came to light when I gave notice. I ended up unemployed for 7 months. The circumstances did qualify me for unemployment, which kept my family’s head above water until I exhausted it. I just started a new role 2 months ago and I’m holding on for dear life. I have met with a lawyer, but I’m worried any legal action will haunt me down the line.

  4. There is another “hidden” reason why employers withdraw job offers. They are, in no particular order, ageism, racism, and intolerance generally with regard to religion or national origin. Here’s how it works. A hiring manager goes through the recruitment process, and due to diligent assessment of the candidates, selects one of them, and issues an offer believing that he/she has the full authority to do so.

    Problems arise when the next manager up tells the hiring manager, “we don’t hire that kind,” or words to that effect, and then adds, “you should have known better.” This is a chilling and potentially career ending conversation. Never mind that it is illegal. It is reality.

    So, to mix metaphors, the fat is in the fire, and, to save his/her job, the hiring manager rescinds the offer on any bogus excuse that comes to mind assuming no contract was signed and that the firm is doing business in an “at will” state.”

    I had the experience once time of showing up on my first day of work only to be shown the door by the next manager up the food chain because I was 20 years older than that person. In assessing my legal options, my bottom line was, if I win, do I want to work there? The answer, of course, was no. I found another job and didn’t look back. Not everyone has the flexibility I had in this situation. An incident like this can toss someone’s life into a tailspin.

    So how do you protect yourself from the hidden threats of discrimination? First, at the on-site interview, look around. What kind of diversity do you see? If you don’t see variety, it could be a red flag if you aren’t cut from that cloth.

    Second, check age ranges. If the place looks like the recent hires room at some giant social media firm, and you are 20 years older, ask yourself if it prudent to continue with the process.

    Third, try to find out how many women are in management roles? Are they in jobs that have significant revenue or operational roles, or are they mostly in support functions like HR, travel, and PR? There are other success criteria, but you get the idea.

    In the end you are responsible for scouting the terrain and for looking for risks. You are going to spend a third of your life working, and you have the right to choose wisely where you do that.

  5. With companies acting in this reprehensible manner why should prospective new hires respect the two week notice “norm”?

    If they consider rescinding a job offer within days of the start date to be acceptable, they should not complain if their employees forego the two-week notice “norm” before leaving for a new job.

    Candidates should wait to receive a job offer in writing, After submitting to all the background and references checks, drug tests, etc. they should confirm via email with the HR contact that they passed.

    They should confirm the start date with the hiring manager, jointly create a written “first 30 days plan”.

    Rather than give 2 weeks’ notice at the previous employer, could they instead just complete any remaining projects – if the employee is a manager and it is performance evaluation time then it’s imperative that they complete evaluations for all of their team members – and create a document that lists all responsibilities, projects, tasks, supervisory issues, etc. along with status, next steps, insights and recommendations. This would essentially serve as a roadmap that could be followed to keep the projects going until a replacement can be found.

    Could that employee then wait until 1, 2 or 3 days prior to the start date at the new company, to give notice at the old company? They can sit for an exit interview, provide the document mentioned above to the previous manager, offer to review it with him/her and basically do everything possible to minimize any disruption. By minimizing the number of days between jobs you eliminate the traditional vacation typically taken to prepare for the next job, but minimizes the potential devastation that a rescinded job offer poses.

    I realize that this goes against established “norms” in the employer/employee relationship. But if employers feel free to disregard these norms, should employees be held to them? With the havoc that a rescinded offer from one employer and often inability to rescind a resignation at the previous employer can cause in a person’s life, an employee must protect themselves and their family.

    • I know from my experience, whenever I put two weeks notice in and start to transition things over, everyone waits until the last minute. So the day before I’m due to depart, I get something like 30-60 minutes with individuals to basically do a giant brain dump. No one ever says, “Hey, start transitioning things over today so that for the next two weeks, you’re around to answer questions.” It’s always, “When do you leave? Ok, I’ll talk to you before then……….”

      Maybe a 2 day notice would make people focus more. It certainly wouldn’t be any worse.

      I worked at one place whose policy was that all sales people were shown the door the minute they resigned. Talk about leaving your customers in a lurch. How do you maintain relationships when you jettison the customer’s main contact like that?

  6. Once had to tell new employer that I would not give notice at old job until background check was completed.

    Friend once had a job offer pulled – not personal this time, the division of the company was 100% shut down, but he was so depressed he took six months to find new job.

    Nick – would you recommend trying to undo resignation at old job, assuming someone isn’t leaving under pressure to find new job, of course.

    • “Once had to tell new employer that I would not give notice at old job until background check was completed.”

      I told this to a company once and they were like “aww come on, if you did nothing wrong, you have nothing to worry about.”

      I personally know people that had drug tests or other checks completely botched.

      That (among other things) was the final nail in the coffin for rejecting that offer. I politely told them to pound sand.

      • Not only botched test but lost tests that had to be retaken, increasing the delay.

        To be fair, before giving notice at the old position, if you are in a current position, you should have a transition plan and documentation in place, so if you have to give short notice, it’s all there.

      • @David: “aww come on, if you did nothing wrong, you have nothing to worry about.”

        I hope you said, “Aww come on… go pound sand.”

    • @Bob: You could try, but I’m not sure it’s a good idea for the old employer to allow the person to return — though I’ve seen it done to everyone’s satisfaction. It’s really a case-by-case thing.

  7. In the early ’50s, my father was offered a job with a major Texas aircraft manufacturer. The job was contingent upon passing a company physical given at the plant in Texas. My father gave notice to his Michigan employer, put the furniture in storage and we pulled up stakes and moved to Texas. You guessed it, he flunked the physical and the offer was rescinded. I learned from my Father’s experience. In the late 70’s I received an offer for an overseas position that was contingent upon passing a company physical. I told their highing manager that I would not give notice until all contingencies had been resolved. I took the physical and I also flunked. I had a left Inguinal Hernia that I was not aware of. The hiring manager agreed that if I underwent corrective surgery he would keep the offer open pending favorable results of the surgery. My current GHP paid 100% for the surgery. My hernia was fixed and I gave notice and got the job.

    • Now THAT is a great story about an employer with integrity!

      • How about a “digital interview” coming back to bite a new hire or employer?

        Please provide an update/opinion on the rise and pending fall of Candidate Analytics? Including the massive storage of applicant videos. The fact any company (willing to pay a fee) can access the “analytics” (nervous behaviors, facial features such as narrow set eyes implying dishonesty) And overall hireability rating similar to a credit rating.

        Nic,
        Considering the FACEBOOK US Senate hearings and the class action lawsuit LexisNexus lost, why would any individual submit a “digital interview,” or any company recruiting new hires be party to the collection, storage, and use of Candidate Analytics.

        Check out HireVue’s presentation to the AI Conference.

        Kitkat

        HireVue, Inc. Presents at Artificial Intelligence Conference, May-02-2018 11:05 AM. Venue: New York Hilton Midtown, 1335 Avenue of the Americas, New York, New York, United States. Speakers: Lindsey Zuloaga.

  8. The hiring manager needed somebody yesterday. I accepted the verbal offer, advising that I would not give notice until all contingencies were out of the way. The hiring firm’s HR department took weeks to get the offer letter to me, and even longer to get a drug test scheduled. In the meantime the hiring manager grew bitter about my holding the line even though his own HR was the cause of delay. Eventually I came onboard but found that any affinity was lost before I’d started. Yet, had I given notice on his schedule, I would have been unemployed for several weeks. This was his first job as a manager, and apparently I was the first person he’d added to the team since his promotion.

  9. Time for an escrow type of process for employment.

  10. People who aren’t currently working must be especially careful of exploding job offers. I’ve had a few, with offers proferred, agreed to, signed off, and rescinded. Employers pretty much know they can beat any Promissory Estoppel court action. They are sleazes to be avoided. But if you take Mayor Bongo’s sound advice, your gut should be wailing ‘don’t go there!!’.

    Torture in hiring is now the norm.

    In my current job, where my gut didn’t wail but currently is (due to several top defections and a negative ’18 forecast), I had a near-perfect disconnect between HR at the (very big) parent company and the small division hiring VP who wanted me at a conference at the end of February. The offer was verbally proferred at the beginning of Feb with a follow up contingency email with then a series of emails initiating the reference check, the drug screening, background check, all online, all passed. And then two weeks go by…no written offer. I had to contact the hiring VP twice who didn’t understand what was going on. This all kept on happening up to three working days before my departure for the conference–a day I had an interview with another company as I kept on looking. HR basically was overloaded, finally sent the written offer, to which I agreed, and then I was deluged with about 15 online documents and videos to be filled out, read, viewed, and checked off before my start. Not exactly relaxing.

    A friend of mine also was recently hired by a large company and had a similar experience, running right down to the wire before he started.

  11. Been in the contracting and staffing industry about 40 years. I have never seen an offer pulled like the one referred to.
    But, assuming the information is correct it is pretty easy to see the issue and have prevented this happening.
    There is information here that is NOT being shared. Maybe the individual was a poor employee at the old firm who was being carried, maybe their work product turned out to be crap after they left. But, the moment they found out that the new company owned the older firm bells should have gone off.
    Loud alarm bells, the individual Left, there is always a reason, rarely a positive one as companies generally can keep the people they want.
    The applicant should have dug into his references, spoken to their old managers and made sure they would be no issues with hard feelings work performance etc. They should have spoken to former managers, told them they might get a call and confirmed that their references would be solid.

    Sorry, but this one lands squarely on the shoulders of the applicant and anyone representing them.

  12. @Jon: Most of the time when I leave a company, it is in good terms, and in situations where my boss would want me back if the opportunity presented itself. This goes for my last company before my current job – they tried to counteroffer and I rejected it.

    Recently, I interviewed with a company that I used to work for, but the division I worked for is 2000 miles from where I am now, and I left nearly 8 years ago. They checked with my old boss, and not only did he remember me, he said “I would hire him back in a heartbeat.” He never really told me that sort of thing when I worked there – the reason I left is the 90 minute commutes each way were killing me. We tried to move more closely but my wife couldn’t find a job and we couldn’t sell our house. (We eventually moved far away – and did a short sale on the house.)

    Fast forward to the present: My current boss tells me I do good work, so even if I get an offer to leave, I probably don’t.

    Note to engineers: Many of us are introverts (I’m an extrovert, however): Tell people you appreciate them – whether as a manager or as a coworker. Tell managers when someone has been really helpful. Just last week I discovered a coworker who I think is brilliant.

  13. During our onboarding process, we send prospective employees to a drug screen and run a background (and MVR for drivers). The background is launched when the applicant electronically completes an authorization. We had planned on hiring a guy, when 3 days before his start date he had STILL not signed the authorization so I ran the part of the background that I already had authorization to run and saw that his MVR was horrible – DUI’s, super speeder violations etc. He’s already given his notice, and we can’t hire him. I think he may have not signed the authorization so we would not get that information. We had to rescind the position as we don’t have any positions for a non-driver. I feel bad about this but I also think he should take some of the responsibility.

    • @HR: Did your company make a job offer to the prospective employee (written or verbal/oral)? Did he accept it (in writing or verbally/orally)?

  14. I’ve not had a job offer rescinded but came close once back in the ’90s. I was the second choice for a position. While I felt bad about not getting the job, that changed after I received an interesting phone call from the recruiter a few weeks later. It seems that the fellow who got the nod for the job accepted the offer, gave his notice, quit his job, and found out on his first day of work that the company had decided to not fill the position after all. Obviously, a legal tussle ensued.

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