Things you need to know about rescinded job offers

What do you do when a prospective employer offers you a job but pulls the rug
out from under you and rescinds the offer before you start work? What happens
if you've sacrificed a good, stable job for one that doesn't materialize, or
if you spent thousands of dollars to relocate? What recourse do you have, if
any?

Most job seekers don't know the answers to these questions, according to Mimi
Moore, a partner in the labor and employment group at Bryan Cave LLP. She says
job seekers tend to be unaware of the specter of rescinded job offers: "People
understand that a job may not work out, that the company might have to do a
reduction in force, but they don't think of a rescinded job offer being a possibility,"
she says.

In fact, rescinded job offers are a growing reality in a weakening economy,
and Moore expects to see an uptick in the coming months. "I think fewer
job offers are going to be extended, and the ones that are will have a higher
probability of being rescinded," she says.

The risk of having a job offer revoked is even greater for executives than
for lower-level workers, says Moore, because executives are often hired so much
farther in advance of their start date. An employer's needs can change between
the time an offer is made to an executive and the time she starts, which can
be six months later. By contrast, lower-level workers are usually hired to fill
an immediate need.

Job seekers at all levels can protect themselves from being blindsided by a
rescinded job offer by asking incisive questions about a prospective employer's
hiring practices and by negotiating certain protections into offer letters and
employment contracts. Moore elaborates on these details for employers and employees
in this Q&A.

CIO: What do employees need to know about rescinded job offers?

Moore: An employer can rescind a job offer at any time. Absent a signed
employment contract between an employee and an employer that provides for a
specific term of employment and specific provisions for breach by either side,
a job offer is essentially a contract for employment at will. Many people think
once they have an offer, it's in writing, they sign it and return it, they think
it's a contract. But really it's a contract for employment at will, which can
be terminated at any time.

Candidates are not employees until they go to work. Even at that point, they're
employees at will. After the first day of work, either party can end the relationship.
Individuals don't have a right to a position [that's been offered to them].

Under what circumstances do employers rescind job offers?

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