How To Rescind A Job Offer (With Examples)

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There are various reasons why an offer of employment may be rescinded. There may be miscommunication between departments, a discrepancy in salary, or a change in leadership. Any of these reasons can cause a job offer to become obsolete. A potential employee may also fail to meet the requirements to get hired.

Whatever the reason, having to rescind a job offer is unfortunate. It can be nerve-wracking to have to tell someone you’re no longer going to hire them. It can affect their livelihood and can also reflect badly on the company’s practices. That’s why it’s important to always be professional, polite, and prompt when retracting a job offer.

Key Takeaways:

Job offers can be legally rescinded as offer letters aren’t contracts.
An offer may be retracted either due to the company’s error or the employee not meeting the requirements.
It’s best to call to inform someone that you’re rescinding a job offer. However, a written communication should also be sent in order to keep a paper trail and make it official.
If the offer is rescinded due to the company’s error, then it is possible for the offeree to claim to have been harmed by the rescindment.

Can a Job Offer Be Rescinded?

A company does have the right to rescind a job offer. However, there can be potential repercussions depending on the reason the offer is withdrawn. There are two major reasons why a company may withdraw a job offer. The first is due to an internal error, meaning that the company is the one at fault. The second is because the candidate didn’t pass screenings.

Reasons that a company can incorrectly extend an offer include:

Double hiring. If there isn’t proper communication between departments, you can end up extending an offer for a position that’s already been filled or offering two employees the same position.
Exceeding the allotted budget. This can be the general hiring budget or offering the candidate a salary that’s higher than approved. Either error could result in the job offer having to be rescinded.
Restructuring. Sometimes companies change before the hiring process is over. That means that the position you’re hiring for may be changed – or eliminated altogether. If it’s just changed, you can offer the candidate that position instead. But if the position no longer exists, you may just have to rescind the offer of employment altogether.
Sending an offer to the wrong candidate. This can be a case of typing the wrong email address in or hitting reply on the wrong email. Whatever the case, this is a mistake that should be corrected as quickly as possible.
Improper conduct. Hiring managers can use improper criteria in their hiring process. For instance, nepotism or discrimination. If so, the HR department should catch it during the review process and take over while apologizing to the candidates in question.
Change in leadership. If there’s a major change in leadership in an organization, the priorities can shift. That means that the positions or qualities you were looking for in a candidate can change.
Failing to check references beforehand. While having poor references can arguably be the potential employee’s fault, if you don’t find out until you’ve sent out an offer letter, it would be yours. If they have poor references, then employment shouldn’t have been offered in the first place.

It’s also possible for a candidate to violate the terms of the offer. These include:

Dishonesty. This is a broad category, but it generally refers to a potential employee lying about or embellishing their resume. For instance, if an applicant claims to have worked somewhere that they haven’t or in a higher position than they did.
Failing a drug test. Many offer letters have a clause that states that the employee’s position with the company is contingent on passing a drug test. If it comes back positive, then you have the right to rescind your offer of employment.
Failing a background check. Along with the drug test, many offers are contingent upon a clean background check.

Exactly what would be problematic will vary depending on the positions you’re hiring for and the candidate, but being convicted of a felony or a crime directly related to the position – such as an accountant embezzling – can be a dealbreaker.
Unbecoming behavior. If, after being offered the position, the candidate posts something offensive on social media, this can be grounds to rescind the offer. Social media isn’t the only outlet, of course. If they’re arrested for disorderly conduct afterward, that can also be sufficient grounds.

Finding out about past unsavory behavior can also be a reason to change your mind about an offer. For instance, if you find out that the potential employee has a history of sexual harassment or domestic abuse, you can decide that’s something that you don’t want your company associated with.

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How to Rescind a Job Offer

No matter the reason, rescinding a job offer is a big deal. You’re dealing with someone’s livelihood, not to mention the investment the hiring team has in their selection. That means that you need to be courteous, direct, professional, and prompt. Be prepared for the candidate to have a negative reaction, and unless it’s excessive, don’t hold it against them.

It’s best to call the candidate to inform them of the offer being rescinded. Once that’s done, you should also send a written communication to that effect. This puts everything in writing and makes it harder for the candidate to sue the company. It also prevents any confusion, whether feigned or genuine.

Of course, some of the show is going to depend on whether the error was yours or the candidates’. If the error was on the company’s end, then it’s even more important that you act quickly and professionally. Be sure to apologize for the error. If there’s a chance to offer them a similar position, it may be in your best interest to do so.

Consider the candidate’s circumstances. For instance:

Did they relocate for this position?
Had they already quit their previous job?
What were your requirements to get the positions? Did the candidate have to do anything, such as getting a certification – especially if it cost them money – to meet your requirements?

If the answer to any of the above is yes, it’s even more important to try to offer some sort of alternative. If it’s simply impossible, then do your best to be as courteous, apologetic, and helpful as you can. Be aware that there’s a chance the offeree could sue. Depending on the nature of the offer, they could claim damages, false representation, or discrimination.

To try to smooth things over, you can:

Give them a way to contact HR if they have any questions.
Offer to give them a positive recommendation for another position.
Tell them you’ll keep their application if a similar position opens up.

If this was a candidate you really wanted to hire, then do your best to make this as painless as possible because you may want to try hiring them in the future.

On the other hand, if the reason for rescinding the letter is the candidate’s fault, then you don’t need to be as careful. Be aware, though, that the organizations that administer drug tests and do background checks can also make errors, especially if your candidate has a common name. Send them your offer rescindment, but be willing to let them correct any mistakes.

How to Write a Letter Rescinding a Job Offer

It can be daunting to write out a letter rescinding a job offer. However, it shouldn’t be overly complicated or long. Because these letters are going to be explaining the situation, they should largely write themselves.

It’s important to note that while you should be apologetic about the rescindment, it’s better not to get bogged down in it. The letter will be a professional communication and should be treated as such.

A letter rescinding a job offer should include the following:

A salutation. This is a requirement for all letters. Since you know the candidate, you should include their full name on the letter. While the letter is formulaic, don’t make it completely impersonal.
An explanation. Tell the offeree why the offer is rescinded. This can be either informing them of the company’s error or of their failure to meet the requirements.
An apology. Depending on the circumstances, this may not be required. If the reason for dropping the job offer is because of their failure to pass a drug test or something similar, then an apology isn’t required. It wouldn’t be out of place to use standard language such as “we regret to inform you,” however.
Contact information. While the candidate likely already has your contact information, it doesn’t hurt to include it. However, it’s important to also include information for them to be able to get in touch with HR if they have questions about the process.
Potential recourse. Information of this sort would only be included in specific circumstances. If their drug test or background check came back flagged, then you should include information to point them to how to contest the results.

Of course, this would only be if the results were wrong or the candidate had a reasonable explanation.

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Sample Job Offer Rescinding Letters

Here are two example letters for rescinding a job offer. The first would be if the need to rescind the offer was because of an error of the company’s fault. The second will be if the reason for the rescindment is because of the employee failing to meet a requirement.

Sample Letter 1

Dear Jamie Marshall,

We are writing to regretfully inform you that the job offer you received was issued in error. Due to the circumstances, we have been forced to rescind it. The offer letter you received was not a binding contract, which means that the Manufacturing Company had no requirement to offer compensation or employment of any variety.

We very much hope that you will consider Manufacturing Company in the future. If you have questions, please contact our HR specialist Jesse Cooper at 555-875-9213 or jcooper@mcompany.com.

Thank you for your time and understanding,

Taylor Foster
HR Manager
Sample Letter 2

Dear Samantha Klein,

We are writing to inform you that we must rescind your job offer at XYZ Company due to information that came up in your background check. This communication has been sent in order to inform you the offer issued for the position of marketing associate is no longer valid.

XYZ Company is under no obligation to offer you compensation or employment. The initial offer letter was not a contract, and the employment offer was at will.

We wish you success in your job search and hope you find the right position for you. If you have questions or concerns, please contact James Waters in our HR department at jwaters@xyzcompany.com or 555-445-4872.

Sincerely,

Allison Kelley
Hiring Manager

Rescinding a Job Offer FAQ

Can a job offer be legally retracted?

Yes, a job offer can legally be retracted. However, it should be noted that under certain circumstances, the offeree may be able to claim to be harmed by your actions if the company is at fault. If the retraction is due to conduct on the candidate’s part, especially if it’s outlined in the offer letter, then there’s no issue.
Can a company be sued for rescinding a job offer?

Yes, it is possible for a company to be sued for rescinding a job offer. However, the complainant would have to be able to prove that they were harmed by the interaction or that the company deliberately misled them.

That’s why it’s important to try to work something out with the potential employee if the offer was removed due to the company’s error. This can be either offering them a similar position, pointing them toward other similar opportunities, or volunteering to be a reference.

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Author

Di Doherty

Di has been a writer for more than half her life. Most of her writing so far has been fiction, and she’s gotten short stories published in online magazines Kzine and Silver Blade, as well as a flash fiction piece in the Bookends review. Di graduated from Mary Baldwin College (now University) with a degree in Psychology and Sociology.