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Can we be liable for revoking a job offer?

by on
in Discrimination and Harassment,Human Resources

Q. We recently made a job offer to someone, rescinded the offer and then hired another applicant two months later. Is there anything illegal about that? — J.G., Vermont

A.
Under general contract law, an offer and acceptance forms a contract. So, if the offer is rescinded before the person accepted, there’s no breach of contract claim.

If the offer is accepted and then rescinded, you’d usually face no liability in employment-at-will states because employees can be terminated at any time for any reason.

But in some cases, applicants have used the doctrine of “promissory estoppel” to claim liability in cases in which an accepted offer is later withdrawn. That’s especially true if the applicant suffered in some way by relying on the offer, such as quitting a job to accept the offer that was later withdrawn, or selling a home and moving.

Also, withdrawing an offer and offering it to someone else could run afoul of discrimination laws. It would depend on the legitimacy of the reason for the withdrawal. A legitimate reason, for example, would be if you acquired new knowledge that the candidate isn’t suited for the job. But if the reason, for example, were discovery of a disability or prior union activity, the withdrawal would be illegal and expose the employer to liability. 

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