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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    The following case study describes the role of the career center when a student’s job offer is rescinded right before graduation.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come to the career center for assistance as she withdrew her candidacy with other companies when she accepted the now rescinded offer. Principles 1 and 2 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 her employment offer a month prior to when she was scheduled to begin work. She was told that A Inc.’s personnel needs for the coming year were overestimated and the company no longer had a position for her. The student in good faith withdrew her candidacy from other companies when she accepted the A Inc. job offer. Now that the semester is nearly over, she no longer has access to companies recruiting on campus. While she considers it of little consolation, A Inc. has offered to send her resume to other employers that are hiring and provide her with a good reference.

    Questions:

    • Which of the 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    • What criteria did the employer use to decide which offers would be rescinded?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 previously 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.

    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 her to share, as best she can remember, what information was provided by the company. If it was simply an e-mail notification, then ask that it be shared with you. If it were a conversation, what was shared with her by the A Inc. representative? 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 her resume and giving her a good reference? On what would the reference be based? Was she previously an intern or co-op student with A Inc.? Sharing with the student that you’ll pursue a similar line of questioning with the employer may help motivate her to be as precise as she can be in articulating to you the communications she had with A Inc.

    For the employer, a significant situation that A Inc. may not have considered is the impact of this offer withdrawal 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 his or her campus network. Beyond having an impact on future prospective hires, faculty members who teach and mentor these students may also form a negative opinion of A Inc. based on this decision and how/why it was made. For this reason especially, 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. In this regard, employers should be able to articulate how they made the decision to rescind that particular student’s job offer. 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 he or she is 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.

    Options for Resolution: Gaining an understanding of the consequences that the student faces may determine what action needs to be taken on her behalf. Although this student withdrew her candidacy from other companies, it is possible that if she reconnects with them and explains the circumstances, one or two may have the hiring flexibility to reinstall her candidacy and perhaps reinstate an offer. If that option is not available, extending services to the student beyond her graduation may be helpful to her. 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? When there was early notification by the companies of these circumstances, CCDs 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(s) affected by this decision can yield positive results. Examples may include the company providing a severance package for the student, handling more of the students’ expenses associated with making a planned move to the company site, or considering 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 should recommend the student seek independent legal advice.

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

    Other Considerations: If policies exist that career services are not fully extended to graduates, to what degree can the career center be helpful to students within the bounds of Principle 2—acting without bias—when providing advisement? This may especially be true if the CCD or a career center professional contacts companies on the student’s behalf and asked them to consider her based on these circumstances. While one could argue that all students affected by having previously offered 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 itself 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.

    An important role that a CCD can play for an employer is that of one sharing best practices. During the Great Recession of 2007-08, quite a few companies faced the prospect of withdrawing accepted offers from graduating students. Many companies simply refused to renege on job offers extended regardless of the business conditions. Among the creative solutions exercised by those that did so included scheduling of personal meetings on campus with students affected and offering outplacement services. One company hired those whom already accepted offers at a significant percentage of their salary to work for a charity of their choice until their full-time appointment began.

    Reviewed and revised by the 2019 Principles for Ethical Professional Practice Committee. Posted September 2019.

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