Receiving a job offer is often followed by a background check before employment begins. While an employer can legally revoke an accepted offer based on the results of this check, this power is heavily regulated by federal and state laws designed to protect the applicant. These protections ensure that employers follow specific procedures and base their decision on valid, job-related concerns. Understanding the legal landscape surrounding conditional offers and adverse actions is the first step toward safeguarding your rights during the hiring process.
Employment At-Will and the Conditional Offer
The foundation for an employer’s ability to revoke an offer lies in the common law doctrine of employment at-will. This principle allows either the employer or the employee to terminate the working relationship at any time, for any reason that is not specifically illegal. Since an offer is generally not considered a formal employment contract, an employer maintains broad discretion to withdraw it. Most job offers are explicitly defined as conditional, pending the satisfactory completion of requirements like drug screenings, reference checks, or a background investigation. This conditional nature provides the employer a legal basis to withdraw the offer if the set conditions are not met.
Employer Obligations Under Federal Compliance Rules
When an employer uses a third-party screening company for a background check, they must strictly follow the procedural requirements of the Fair Credit Reporting Act (FCRA). This federal statute governs the use of consumer reports for employment purposes and mandates a specific two-step process if the information may lead to an adverse employment decision. The initial step requires the employer to issue a “pre-adverse action notice” to the candidate.
This notice must include a complete copy of the background check report obtained from the consumer reporting agency. The employer must also provide a copy of “A Summary of Your Rights Under the Fair Credit Reporting Act,” published by the Consumer Financial Protection Bureau. This initial notification gives the applicant an opportunity to review the report for any inaccuracies or errors before the decision is finalized.
Employers must allow a reasonable period, typically five business days, to pass between the pre-adverse notice and the final action. If the candidate does not dispute the information, the employer proceeds with the second step: sending the “adverse action notice.” This notice formally states that the offer has been rescinded based wholly or partially on the background report. The final notice must also detail the candidate’s right to obtain another free copy of the report from the agency within 60 days and the right to dispute the accuracy of the information.
Primary Reasons Job Offers Are Rescinded
Background checks reveal information directly related to a candidate’s suitability for a specific role. Several categories of findings frequently lead employers to revoke an offer.
Discovery of Criminal History
The discovery of a criminal record is a common reason for rescission, but the decision must be based on more than just the existence of a conviction. Employers must assess the offense’s relevance to the job duties, considering the nature and gravity of the crime, the time passed since the conviction, and the specific duties of the position sought. For example, a recent conviction for embezzlement is likely related to a position involving company finances. Conversely, an old, minor offense that has no bearing on the job’s responsibilities should not automatically result in a rescinded offer.
Material Misrepresentation or Omissions
The most direct reason for withdrawing an offer is the discovery of dishonesty on the application or resume. If a background check reveals that a candidate intentionally misrepresented employment dates, educational degrees, job titles, or salary history, the employer can usually rescind the offer immediately. This is viewed as a breach of trust, providing the employer with a non-discriminatory, job-related reason to question the candidate’s integrity.
Poor Driving or Credit History
Specific checks beyond criminal history are permissible only if they are directly relevant to the business necessity of the position. A poor driving history, including multiple recent violations, provides grounds for rescission only if the job requires operating a company vehicle or frequent driving. Similarly, a credit check may be used to revoke an offer for roles with extensive financial responsibility, such as an executive position or one with access to large sums of money. This type of check is restricted for most other jobs.
When Rescinding an Offer Becomes Illegal
An employer’s decision to rescind an offer cannot violate federal anti-discrimination statutes, despite the leniency afforded by at-will employment. Title VII of the Civil Rights Act of 1964 prohibits discrimination in hiring based on protected characteristics like race, color, religion, sex, and national origin. If background check information is used to deny employment to a member of a protected class without a valid business necessity, it can lead to a legal claim of discrimination.
This includes policies that appear neutral but have a disproportionate, negative impact on protected groups, such as a blanket ban on hiring anyone with a criminal history. Many states and localities have adopted “Ban the Box” or “Fair Chance” laws that supersede the at-will doctrine in this context. These laws mandate that an employer conduct an “individualized assessment” before withdrawing an offer due to a criminal record. This assessment requires the employer to evaluate the nature and gravity of the offense, the time elapsed since the conviction, and the specific relevance of the conviction to the job duties.
What to Do If Your Job Offer Is Rescinded
If you receive the formal adverse action notice, carefully review the background report provided by the employer. This document is the evidence used against your application, and you must verify the accuracy of every detail. If you identify any incorrect or outdated information, you must formally dispute it directly with the Consumer Reporting Agency that generated the report. The FCRA process is designed to give you a chance to correct errors before the final hiring decision is made.
If the report information is accurate but you believe the employer misjudged its relevance, you can contact the employer to present mitigating circumstances. This involves proactively providing documentation, such as evidence of rehabilitation, character references, or proof that the conviction is legally sealed or expunged. Presenting a case that the conviction is not directly related to the job duties may lead the employer to re-evaluate its decision. You should also check whether the employer followed all required federal and local notice procedures, as procedural failures can be grounds for an appeal or legal action.