Job Offer Withdrawal Letter

A job offer withdrawal letter, also called a rescission of offer letter, is a document an employer sends to a candidate to formally withdraw a job offer that was previously extended. Employers may need to rescind an offer for various reasons, such as a failed background check or drug test, the candidate not meeting a contingency like proof of work authorization, a change in business circumstances, the elimination of the position, or the discovery of misrepresentations in the candidate's application. The letter informs the candidate that the offer is being withdrawn and, depending on the situation, may state the reason. Withdrawing a job offer can carry some legal risk, particularly if the candidate relied on the offer to their detriment, such as by resigning from another job or relocating, which could in some cases support a claim, or if the withdrawal is for a discriminatory or retaliatory reason. When the withdrawal is based on a background check from a consumer reporting agency, the employer must follow the Fair Credit Reporting Act adverse action process. Because rescinding an offer affects the candidate and can involve legal considerations, the letter should be handled carefully and the reason, where appropriate, should be lawful.

An employer can generally withdraw a job offer legally, especially before the candidate begins work and when the offer was conditional or the employment would be at-will, but rescinding an offer can carry some risk. If the offer was contingent on conditions such as a background check, drug test, reference check, or proof of work authorization, the employer can withdraw it if a condition is not met. For at-will offers, the employer usually retains the ability to rescind, since the employment could be terminated at will once it began. However, the withdrawal cannot be for an unlawful reason, such as discrimination based on a protected characteristic or retaliation for protected activity, which would be illegal. Additionally, a candidate who relied on the offer to their detriment, such as by quitting another job or relocating, might in some circumstances assert a claim under a theory like promissory estoppel, though success depends on the facts. Because the legality and risk depend on the offer's terms and the reason for withdrawal, an employer should ensure the reason is lawful and consider any reliance by the candidate. An employer can usually withdraw a job offer, but it should do so for a lawful reason and be mindful of potential reliance claims.

A job offer withdrawal letter should clearly inform the candidate that the previously extended job offer is being withdrawn, and, depending on the circumstances, may state the reason while maintaining a professional and respectful tone. The letter should identify the position and reference the prior offer, state that the offer is rescinded, and, where appropriate, briefly explain the basis, such as a failed contingency, while avoiding statements that could suggest a discriminatory or retaliatory reason. Keeping the language professional helps preserve the employer's reputation. If the withdrawal is based on a background check or consumer report obtained through a third-party agency, the employer must instead follow the Fair Credit Reporting Act adverse action process, which requires a pre-adverse action notice with a copy of the report and a final adverse action notice, rather than simply sending a standard withdrawal letter. The employer should ensure the reason is lawful and consider any reliance by the candidate. Because the letter affects the candidate and can involve legal considerations, it should be careful and accurate. A job offer withdrawal letter should clearly rescind the offer, state a lawful reason where appropriate, and follow the required process when a background check is involved.

A candidate may have grounds to sue if a job offer is withdrawn in certain circumstances, although in many cases an employer can lawfully rescind an offer, particularly an at-will or conditional one. Potential bases for a claim include discrimination, if the offer was withdrawn because of a protected characteristic such as race, sex, age, disability, or another protected basis, or retaliation for protected activity, both of which are unlawful. A candidate who detrimentally relied on the offer, such as by resigning from a secure job, declining other offers, or relocating, might assert a claim under promissory estoppel in some jurisdictions, seeking to recover the losses caused by the reliance, though success depends on the facts and the offer's terms. If the withdrawal followed a background check obtained through a consumer reporting agency and the employer did not follow the Fair Credit Reporting Act adverse action process, that procedural failure can create liability. Because the availability of a claim depends on the reason for the withdrawal and the candidate's reliance, employers should ensure withdrawals are for lawful reasons and follow required procedures. A candidate may be able to sue when a job offer is withdrawn for a discriminatory or retaliatory reason, in reliance situations, or where required processes were not followed.

The Fair Credit Reporting Act (FCRA) applies when an employer withdraws a job offer based in whole or in part on information in a background check or consumer report obtained through a third-party screening company, and the employer must follow the FCRA adverse action process. Under the FCRA (15 U.S.C. 1681), before taking adverse action such as rescinding an offer based on the report, the employer must provide a pre-adverse action notice that includes a copy of the report and a summary of the candidate's rights, and give the candidate a reasonable time to review and respond, since the report may contain errors. After that period, if the employer proceeds with the withdrawal, it must provide a final adverse action notice informing the candidate of the decision and their rights, including the right to dispute the report's accuracy with the consumer reporting agency. This process protects candidates from being denied employment based on inaccurate background information. Because failing to follow the FCRA process can create liability, an employer withdrawing an offer based on a background check must provide the required notices rather than simply sending a standard withdrawal letter. The FCRA adverse action process applies whenever a consumer report drives the decision to rescind the offer.