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  • Case Study: When an Employer Rescinds a Job Offer

    Organizational Structure
    An HR professional calls a student to rescind a job offer.

    TAGS: case study, ethics, principles

    Summary

    The following case study describes the role of the career center when a student’s job offer is rescinded right before graduation. The student has come to the career center for assistance as they withdrew their candidacy with other companies when they accepted the now rescinded offer.

    Principles 1, 2 , and 4 of the Principles for Ethical Professional Practice are used to address this scenario. This case study provides insight on the following:

    • The role of career centers in this situation.
    • Potential actions that can be taken on behalf of the student.
    • Implications for the employer given the employer’s actions.
    • Considerations for alumni services.
    • Potential legal implications.

    The Case

    Scenario: The career center was informed by a graduating student that A Incorporated revoked their employment offer a month prior to when they were scheduled to begin work.

    The student was told that A Inc.’s personnel needs for the coming year were overestimated and the company no longer had a position for the student. The student in good faith withdrew their candidacy from other companies when they accepted the A Inc. job offer. Now that the semester is nearly over, they no longer have access to companies recruiting on campus. While the student considers it of little consolation, A Inc. has offered to send their resume to other employers that are hiring and provide them with a good reference.

    Questions:

    • Which of Principles for Ethical Professional Practice are relevant to this situation?
    • In what way can the career center be of assistance to the new graduate?
    • If office policies restricting alumni access to career services exist, should they be suspended to help this student?
    • What follow-up, if any, should the career center director (CCD) consider with the employer?
    • Would understanding why the hiring needs were overestimated help?
    • What criteria did the employer use to decide which offers would be rescinded?
    • What is the potential impact that this decision could have on the company’s reputation on campus?

    Principles That Apply:

    • Principle 1: Practice reasonable, responsible and transparent behavior by clearly articulating and widely disseminating the organization’s policies and guidelines.
      • To what degree was A Inc. transparent in providing reasons for withdrawing the accepted offer? Was the offer of referring her resume to employers and providing a good reference sufficient to be considered reasonable behavior?
    • Principle 2: Act without bias when advising, servicing, interviewing, or making employment decisions.
      • Pursuit of more information from the employer as to the criteria they used to rescind offers may reveal whether or not this principle was violated.
    • Principle 4: Comply with laws.
      • Has A Inc. violated any laws, including ,but not limited to, EEO compliance, immigration, and affirmative action?

    Analysis: With this situation being communicated by the student, it may be wise to pursue more information about this situation from the student first.

    Ask the student to share any communications they had with A Inc., including, but not limited to, any offer letters, employment agreements, emails, or other documentation which documents the initial offer and agreement of employment.

    Additionally, ask that they share, as best they can remember, what information was provided by the company when rescinding the offer. If this was done via an email notification, then ask that the email be shared with you. If it were done through a conversation, ascertain what A Inc.’s representative told the student. Was there any further detail offered relating to the company’s overestimate of positions needed? Did the company share if there would be an impact on other graduates who accepted offers? Were there other employment options within the company that were offered to the student? Were there any other considerations beyond the offer of referring to their resume and giving them a good reference? On what would the reference be based? Was the student previously an intern or co-op student with A Inc.?

    Also ask the student if anything occurred with A, Inc. and the student between the time of the offer and the time the offer was rescinded. Did the student share any personal information, such as a medical condition, with A, Inc. during this time period? Letting the student know that you will pursue a similar line of questioning with the employer may help motivate them to be as precise as they can be in articulating to you the communications they had with A Inc.

    For its part, A Inc. may not have considered the significant impact the offer withdrawal could have on its campus reputation. With so many students frequently connecting to their friends and classmates through social media, a student perceiving mistreatment by a company could spread very quickly within their campus network. In addition, faculty members may also form a negative opinion of A Inc. based on this decision and how and why it was made. As a result, restoring A Inc.’s reputation on campus could take several years. Many CCDs consider it an important professional obligation to fully brief employers on the potential consequences of their job offer withdrawal decision on campus relations.

    Employers should also be mindful of the potential claims that can arise as a result of rescinding a job offer, and whether the decision complies with local, federal, and state laws. In this regard, employers should be able to articulate how they made the decision to rescind that particular student’s job offer.

    In relation to Principle 4, employers are covered by state and federal EEO laws, statutes, and regulations that prohibit discrimination in employment, which would include rescinding a job offer. As such, employers should document how any such decisions are made. Further, while it may be a difficult case to make for the student, a potential claim for detrimental reliance may be brought against the employer. For example, if a student moved and purchased a home or rented an apartment in reliance on the offer, the student may claim that they are now entitled for the costs associated with such acts. While this is a potential claim, it is difficult to establish because most positions are “at-will,” which means the student could have been terminated a day, a week, or a month after starting employment.

    Employers should also review any offer letters, employment agreements, or other written documents that pertain to the student’s employment. Was anything “guaranteed,” such as a sign-on bonus? Even if the offer was properly rescinded, the language used in any written documentation can give rise to a claim for breach of contract if any benefit was guaranteed by the employer to the student. 

    Options for Resolution: Gaining an understanding of the consequences that the student faces may determine what action needs to be taken on their behalf.

    Although this student withdrew their candidacy from other companies, it is possible that if they reconnected with those companies and explained the circumstances, one or two may have the hiring flexibility to reinstall their candidacy and perhaps reinstate an offer. If that option is not available, extending career center services to the student beyond their graduation may be helpful to them. Many career centers extend services to recent graduates for a set period of time, so perhaps no changes to guidelines or policies would need to be considered.

    Is there an impact that the CCD can have on the company decision? Had the company contacted the CCD in advance about the circumstances prompting the withdrawal, the CCD could have had an impact on the decision making. However, when notified after the fact by the student and not the company, the chances for such a change in an employer’s decision making is much more remote.

    Nevertheless, the CCD’s effort to assist the student affected by this decision may yield positive results. For example, the company could decide to provide a severance package for the student, handle the student’s expenses associated with making a planned move to the company site, or consider the student for other positions and geographical locations within the company or affiliated subsidiaries if that action has not already been offered. However, given the circumstances, the CCD also should recommend the student seek independent legal advice.

    Ultimately, efforts that lead the student to believe that A Inc. treated them fairly given the circumstances will reduce the likelihood that the company’s reputation on campus will be impugned.

    Other Considerations: If a policy exists that the career center does not extend its services fully to graduates, to what degree can the career center be helpful to students within the bounds of Principle 2—acting without bias—when providing advice?

    This may especially be true if the CCD or a career center professional contacts companies on this student’s behalf and asks them to consider the student based on these circumstances. While one could argue that all students affected by positions withdrawn would be extended services beyond what policy dictates, there will still be risks involved, specifically if the CCD does not provide such additional services uniformly. If the CCD “picks and chooses” who it will provide additional services to, it may expose the career center and institution to a claim of discrimination. For legal considerations, the CCD may wish to pursue assistance from campus legal counsel. For other matters, office policy narrative should be reconsidered and potentially revised.

    CCDs should remind employers to consider the situation of certain student populations, such as international students, and continue to educate employers on the value of all student candidates. Employers could consider geographical alternatives for bringing such candidates on board with their organization. CCDs could also direct employers to campus or community resources for additional support for international students.

    An important role that a CCD can play for an employer is that of one sharing best practices. With the economic impact of the COVID-19 pandemic on the job market, quite a few companies withdrew offers from prospective interns and some graduating students. Other companies made their best efforts to support job offers and/or paid internship offers extended regardless of the business conditions.

    Companies could consider creative solutions, such as offering outplacement services through the CCD, delaying the candidate’s start date for a more favorable future point for onboarding, or offering a significant percentage of salary to work for a charity of their choice until their full-time appointment can begin. (Note: To the extent an employer decides to implement one of these alternatives, it is recommended that they seek the advice of their legal counsel to ensure that they are complying with all state, federal, and local laws.)

    Reviewed and revised by the 2021 Principles for Ethical Professional Practice Committee. Posted
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