Who won this case: Company changes its mind after offer is made
July 8, 2008 by Sam NarisiPosted in: Firing, Hiring, In This Week's E-Newsletter, Latest News & Views
A company offers a candidate a job. But circumstances change, and the offer’s rescinded. Can the candidate sue? Read the facts of this real-life case and decide: Who won?
The facts:
A man was offered a job. He received an official offer letter, but after the employer checked his references, the hiring manager decided he wouldn’t be a good fit. So the manager called him and took the offer off the table. He sued, claiming the company broke a contract. He said he “suffered a loss” because he’d already quit his previous job and prepared to relocate.
The employer:
The man was an at-will employee and never had a contract. Like any at-will worker, he could be terminated at any time — including before his first day of work.
Who won the case?
Answer: The employer.
Why: The court agreed that the man was an at-will employee and could be let go at any time. On the other hand, the hire argued that the at-will relationship didn’t start until he started working.
By his reasoning, the court said, that meant he could have been fired on his first day, but not before. Logically, it made more sense for both the employer and the employee not to waste any more time if the company had already made its decision.
Cite: Pettite v. DSL.net, Inc.
Tags: at-will, offer letters, rescinded offer
July 11th, 2008 at 12:30 pm
Here you go
July 11th, 2008 at 12:39 pm
During the hiring process, which include checking references, background check, medical, credit, an individual can be released and this infomation is being checked before and after the employee starts. Common sense and compassion would have lead anyone to terminate his employment prior to travelling the distance.
July 11th, 2008 at 12:40 pm
The company won.
July 11th, 2008 at 1:11 pm
This is just one reason why the offer letter (if done before the background, etc is completed) d state that the offer of employment is contingent of successful/positive completion of background check, drug test and physical, reference checks, criminal background, etc. This way hopefully the applicant won’t “quit his previous job” before all is done and confirmed.
July 11th, 2008 at 3:34 pm
What about promissory estoppel? Would that not have bearing in this case?
July 14th, 2008 at 12:29 pm
Jackie T is right… You should never make an offer of employment that isn’t “contingent upon” a positive background check (including references, criminal history, education, etc.) and a negative drug and/or alcohol screening. An individual can even START work so long as you have clearly documented the expectations that their employment is contingent upon these things. We’ve terminated individuals after they have started work if their background check comes back with things they have not previously disclosed. (Example: Application asks if you have ever been convicted of a crime. Applicant checks “no”. His background check took longer than normal because he DID have criminal history — 3 counts of possession of a controlled substance for which he was confined on 2 of the 3 convictions and the last conviction was within the past 2 years. Obviously, we called him in and terminated him but the reason was for “falsification of information on his application”. Had he indicated he had been convicted of a crime on his applications, we would have delayed his start date until we had actually received back the background check.)
One caution… if you take negative action against someone because of something you identify in a background check, be sure you (or the company that does your background checks) provides appropriate information to the applicant and/or employee regarding the Fair Credit Reporting Act.