8 things you need to know about rescinded job offers

It is rare for an employer to rescind a job offer, but it does happen. Here, two legal experts share what you need to know to reduce the risk that it will happen to you … and what to do if it does.

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

For most job seekers, rescinded job offers aren’t a topic they know or hear much about, especially given the tight IT employment market of the last few years. While “…people understand that a job may not work out, that a company might have to do a reduction in force, but they don’t think of a rescinded job offer being a possibility,” says Mimi Moore, a partner in the labor and employment group at Bryan Cave LLP.

Rescinded job offers aren’t that common

That’s because the scenario isn’t that common, says Chas Rampenthal, general counsel for LegalZoom. “In this age of social media and sites like Glassdoor and other review sites, if this was something happening regularly, we’d definitely hear about it,” Rampenthal says. “I’d advise folks to check out these sites in their regular vetting process when looking for a new role, and if a company has rescinded offers, I’d bet such a thing would be reported there,” he says.

The strength of the economy, and especially the strength of the IT sector, also keeps the number of rescinded job offers low, Rampenthal says. With fewer options available, companies would be loathe to rescind offers to valuable talent – though a weaker economy could lead to an uptick in offers being revoked.

The risks rise as you climb the ladder

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 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 as much as six months later. By contrast, lower-level workers are usually hired to fill an immediate need.

“There’s also employer size to take into account, as well as specialization,” says Rampenthal. “It’d be more common for a very small company of two or three people adding a fourth person — and possibly rescinding an offer because circumstances change — than a large organization with the resources to add hundreds of people,” he says. Organizations are less likely to rescind an offer to specialized talent with specific skills and experience than offers to unskilled workers, he says.

You can reduce risk by asking the right questions

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 says.

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