Reaching the offer stage can be a wonderful experience for everyone. Fortunately
the majority of offers are extended and accepted without a great deal of complication. Unfortunately, there will be situations where you will need to rescind an offer. The best practice is to start with a verbal offer, once the candidate verbally approves the offer let them know a formal written offer will arrive within your stated timeframe. Provide a termination date in the written offer stating as to when the offer needs to be formally (in writing) accepted.
Following are some reasons as to why you may need to rescind an offer:
• Background check failed
• Drug screen failed
• Physical failed
• Candidate falsified information on their application
• Candidate did not accept the offer within the agreed upon time
• Candidate indicates poor character towards the end of the offer process
• Candidate has unrealistic requests to make changes to the offer
• Candidate has a counter-offer from current employer that they want to accept
Reasons why you should not rescind an offer: Discrimination. For example, during the job offer, the candidate informs you that they are diabetic but they have it under control. You become concerned about how this might impact your health insurance rates and you want to rescind the offer. Don't rescind unless you want to fear being sued under the ADA (Americans with Disabilities Act). Another more common example might be where you make an offer to a female, who informs you during the offer process that she is pregnant. Don't rescind that offer unless you want to fear being sued under the Pregnancy Discrimination Act.
If you must rescind, it is always best to do so prior to it being accepted in writing, otherwise you may expose yourself to liability. Talk to a lawyer to examine the exact circumstances and the language of your offer letter to assess your options.
Provide very little detail in feedback when rescinding. Give an inch of feedback and expect a mile of arguing and potential lawsuits.
A properly worded offer letter will make any necessary rescinding go as smoothly as possible.
Following are some sample 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 background investigation and pre-employment drug testing (which must be completed within 72 hours of your acceptance to this offer).
Clearly state that the offer is for at-will employment: This letter is intended to outline your offer and does not constitute an employment contract between you and CompanyX. Your employment will be at-will and not guaranteed.
All offer letters should state that the relationship is 'at will'. Unless you truly intend to create a binding employment contract, do not use the term "employment contract" in your offer letter.
Knowing how & when to rescind creates a win-win situation.