As you prepare to open your new business, one of your key focuses will be hiring the right professionals. This may be something you don’t have much experience with.
One situation that can be a source of concern is having to rescind a job offer. Sometimes a business owner or someone on their team will interview a candidate who seems perfect. Their references check out, so they make an offer, and the candidate accepts. This is all in writing.
Then something happens that requires revoking the offer. Can an employer do that without risking being sued?
In most cases, you can. The primary exception would be if you’ve drawn up an employment contract that the candidate signed – which is different than an offer letter. Assuming you haven’t done that, California has “at-will” employment laws. An employer can terminate someone for any reason other than an unlawful one – such as because the employee belongs to a legally protected class. Similarly, a job offer can typically be revoked – as long as it’s not based on an illegal reason.
Problems with the candidate might surface
There are a number of valid reasons why employers revoke job offers. Some involve the candidate, while others are related to the company.
Candidate-related issues typically involve things that crop up in the full review of that candidate. For example, the background check might reveal that they lied about graduating from college or how much experience they’ve had
If a drug test is required, they may have failed that. If a credit check is required, something might show up that would make you question whether they can be trusted with clients’ money.
You can avoid these problems by withholding the offer letter until everything has checked out. Your offer should also state that it’s dependent on the results of any pending due diligence on the candidate.
The company may not need that candidate after all
Sometimes offers need to be rescinded because a company decides not to fill a particular position or that they already have enough people. Sometimes, a better candidate comes along.
It’s wise to handle these situations tactfully to help avoid hard feelings that could be detrimental to your fledgling business. However, if you protect yourself legally, you should have no worries about threats of litigation going anywhere. It’s always best to have sound legal guidance before beginning the hiring process.