The sudden withdrawal of a job offer can be a deeply unsettling experience, often occurring after a candidate has mentally and professionally committed to a new career path. A formal job offer, typically delivered in writing, represents an employer’s promise of future employment and compensation. Understanding the circumstances under which this promise can be legally retracted is important for any job seeker. This article explains the legal framework governing offer revocations, detailing the common permissible reasons for rescission and the situations where a candidate may have legal recourse.
The Legal Foundation of Job Offers: At-Will Employment
Most private sector employment in the United States operates under the doctrine of at-will employment, which defines the relationship between an employer and an employee. This doctrine establishes that either party can terminate the employment relationship at any time, for any reason or no reason, provided the reason is not unlawful. This standard means that a job offer, even when accepted, generally does not constitute a binding, fixed-term contract.
This principle holds true even before the employee’s official start date, making most accepted offers revocable by the company. An employer is typically free to withdraw an offer without incurring liability because the prospective employee would have been “at-will” from day one. This means the accepted offer is a statement of intent rather than an ironclad agreement of employment. The doctrine is widely applied across 49 states; Montana is the sole exception, requiring “good cause” for termination after a probationary period.
This framework allows a company to rescind an offer if, for instance, a sudden internal reorganization eliminates the open role or a new manager changes the team’s hiring priorities. Because the employment would have been terminable without cause after starting, the law generally views the pre-employment withdrawal similarly. The primary legal vulnerability for employers arises not from the act of rescinding the offer itself, but from the specific reason for the rescission or the candidate’s reasonable reliance on the promise.
When Rescission is Expected: Conditional Offers
Many job offers are extended with explicit contingencies that, if unmet, provide a legal basis for the employer to withdraw the offer. These conditional offers shift the risk of non-performance onto the candidate until all requirements are satisfied. The offer letter typically outlines these requirements, making the candidate aware of the prerequisites for final employment.
A common condition involves the successful completion of a background check, which may cover criminal history, financial records, or driving infractions depending on the role. Many companies also require candidates to pass a drug screening; a failed test provides a permissible reason for rescission. The inability to verify professional credentials, such as an advanced degree or past employment dates, can also void a conditional offer.
For positions requiring specialized authorization, such as a security clearance or proof of legal work status, the offer remains contingent on the candidate securing these documents. A company may also legally withdraw an offer if an unforeseen external business change occurs, such as an unexpected budget cut or the loss of a major client that necessitates eliminating the newly created position. In these instances, the rescission is permissible because the job’s underlying conditions were not met or have fundamentally changed.
Illegal Rescission: Breach of Contract or Discrimination
While the at-will doctrine grants employers broad discretion, two primary legal exceptions restrict a company’s ability to withdraw an offer: the existence of a binding contract or the use of an unlawful, discriminatory basis. An employer cannot legally rescind an offer if the action violates the terms of an existing employment agreement. This occurs when the offer letter or a separate employment contract includes specific language that limits the employer’s right to terminate, such as a guaranteed fixed term of employment or a requirement for termination only “for cause.”
A written contract that specifies a duration, such as a two-year employment term, overrides the standard at-will relationship and makes rescission a potential breach of contract. Candidates who have negotiated specific termination clauses or are offered employment through collective bargaining agreements may also be protected from arbitrary offer withdrawal. In such cases, the candidate may be entitled to damages equivalent to the compensation lost for the period covered by the contract.
The second form of illegal rescission occurs when the employer’s decision is based on a candidate’s protected characteristics. Federal and state laws prohibit revoking an offer based on a person’s race, color, religion, sex, national origin, age (if over 40), genetic information, or disability status. If an employer uses a failed background check as a pretext to discriminate against a candidate based on a protected characteristic, the rescission remains unlawful. Withdrawing an offer upon learning of a candidate’s pregnancy or a non-disqualifying medical condition constitutes illegal discrimination.
Recourse Through Promissory Estoppel
Candidates who suffer a financial loss after relying on a job offer may have recourse through the legal doctrine of promissory estoppel, even when no formal employment contract exists. This doctrine provides a remedy when one party makes a clear promise, the second party reasonably relies on that promise, and suffers a quantifiable detriment as a result. Promissory estoppel prevents an injustice caused by broken promises, even in an at-will environment.
To successfully invoke promissory estoppel, a candidate must demonstrate that the job offer was a clear promise intended to induce action. The candidate must prove they took concrete steps in reasonable reliance on that offer, such as resigning from a stable current job, relocating, or breaking a lease. The third element requires the candidate to show a measurable financial loss, or detriment, directly caused by the reliance. This loss includes moving expenses, lost wages from the previous job, or costs associated with selling a home.
If the court determines that the employer should have reasonably foreseen the candidate’s actions, and that only an award of damages can prevent an unfair outcome, the candidate may be compensated for out-of-pocket losses. Damages under promissory estoppel are typically limited to reliance damages, which cover the costs incurred by the candidate. They usually do not include the full salary or benefits that would have been earned in the new position. This remedy allows candidates to recoup expenses without having to prove a formal breach of contract.
What to Do If Your Offer Is Rescinded
The immediate step after receiving notice of a rescinded offer is to remain professional and request a clear reason for the decision in writing. Candidates should document all communication related to the offer, including the initial offer letter, email correspondence, and the written notice of withdrawal. It is helpful to retain evidence of reliance, such as the resignation letter submitted to the previous employer, receipts for moving services, or documentation of housing deposits.
Carefully assess the reason provided by the employer to determine if it falls under a legitimate conditional failure, such as a failed drug screen, or if it suggests a potentially illegal basis. If the rescission cites a condition, review the original offer letter to confirm the condition was clearly stated and legally permissible. If the reason appears arbitrary or relates to a protected characteristic, the matter warrants further investigation.
If a candidate suspects the rescission was discriminatory, a breach of contract, or if significant reliance costs were incurred, consulting with an employment lawyer is advisable. An attorney can review the facts and determine the viability of a claim based on discrimination or promissory estoppel. Candidates may also file a charge of discrimination with the Equal Employment Opportunity Commission (EEOC) if they believe a protected class was the basis for the withdrawal.
Protecting Yourself Before Accepting an Offer
Job seekers can take several proactive measures to minimize the financial and professional risks associated with an offer withdrawal. Negotiating a start date that allows sufficient time for all contingencies, such as background checks and drug screenings, to be fully processed and cleared is prudent. Waiting for the final, unconditional confirmation before notifying a current employer of resignation significantly reduces the risk of being unemployed.
Reviewing the job offer letter for specific language is an important protective step. Candidates should look for clauses that explicitly state the employment is for a fixed term or that termination requires a specific process. This language can strengthen a claim of breach should the offer be withdrawn. Asking the prospective employer for written clarification that all conditional requirements have been met before giving notice at the current job provides an extra layer of security. Taking these steps shifts the burden of certainty onto the hiring company and protects the candidate from premature career disruption.