Getting to the offer stage can be a wonderful experience for everyone. Fortunately
most offers are extended and accepted without further complication. Unfortunately, there will be situations where you will need to rescind an offer. Best practice is to start with a verbal offer, once the candidate verbally approves the offer, let them know that they will receive a formal written offer by the deadline. Provide an end date on the written offer indicating when the offer must be formally accepted (in writing).
The following are some reasons you may need to rescind an offer:
• Background check failed
• Failed drug test
• Physical failure
• The candidate falsified information on their application
• The candidate did not accept the offer within the agreed time
• Candidate indicates poor character toward the end of the offer process
• The candidate has unrealistic requests to make changes to the offer
• The candidate has a counter offer from the current employer that they want to accept
Reasons you should not rescind an offer: Discrimination. For example, during the job offer, the candidate informs you that he is diabetic but has it under control. He is concerned about how this might affect his health insurance rates and wants to rescind the offer. He does not terminate unless he wants to fear being sued under the ADA (Americans with Disabilities Act). Another more common example might be when you make an offer to a woman, who informs you during the offer process that she is pregnant. Do not rescind that offer unless she wants to fear being sued under the Pregnancy Discrimination Act.
If you must terminate, it is always best to do so before it is agreed to in writing, otherwise you may expose yourself to liability. Talk to an attorney to review the exact circumstances and language of your offer letter to assess your options.
Please provide very few details in the comments when rescinding. Give an inch of feedback and expect a mile of discussions and potential lawsuits.
A properly drafted letter of offer will ensure that any necessary termination is carried out in the best possible way.
The following are some examples of protective wording to include in your offer letter.
Clearly state the mandatory conditions for the position: This offer is contingent upon the successful completion of your pre-employment background investigation and drug test (which must be completed within 72 hours of your acceptance of this offer).
Clearly state that the offer is for employment at will: This letter is intended to describe your offer and is not an employment contract between you and CompanyX. Your employment will be at-will and not guaranteed.
All offer letters must state that the relationship is ‘at will’. Unless you really intend to create a binding employment contract, don’t use the term “employment contract” in your offer letter.
Knowing how and when to terminate creates a win-win situation.