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Ask The Headhunter: What To Do When Your Job Offer Is Cancelled

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Nick Corcodilos started headhunting in Silicon Valley in 1979, and has answered over 30,000 questions from the Ask The Headhunter community over the past decade.

In this special Making Sense edition of Ask The Headhunter, Nick shares insider advice and contrarian methods about winning and keeping the right job, on one condition: that you, dear Making Sense reader, send Nick your questions about your personal challenges with job hunting, interviewing, networking, resumes, job boards, or salary negotiations. No guarantees — just a promise to do his best to offer useful advice.

Nick Corcodilos: I received quite a bit of mail from readers about last week’s column, “What If My Job Offer Was Rescinded After I Quit My Old Job?” It included many stories, past and present, about employers making job offers and then canceling them.

In some cases, people quit their old jobs and were left jobless. One moved across the country only to find the job had disappeared. On two positive notes, one reader said she was able to get her old job back, and another says he got his old job back with a raise!

I’ve personally seen a number of sad “rescinded offer” cases over the years, but not as many as I suddenly encountered through this column. I’m astonished and appalled, and that’s why I think this topic needs further discussion.

Ask The Headhunter isn’t a legal column, and I don’t pretend to offer legal advice. But questions about what’s legal and what’s not are at the heart of this matter. Do employers have a right to fire people? Of course they do, especially in states where employment is “at will.” Can they legally offer you a job, then cancel it? That remains a question.

One reader who responded to the column, Lawrence Barty, is a retired attorney who has specialized in employment and labor law, and particularly in employment contracts. Mr. Barty generously shared his thoughts and expertise in several emails, and I think readers would benefit from reading them. I know I learned a lot! He also offers some specific tips for handling offers given over the telephone.

Please keep in mind that comments offered by lawyers in this column do not pertain to any specific case. If you have a problem with a job offer, you should consult with an attorney who knows the law in your own state.

Here’s what Mr. Barty has to say:

I am a recently retired employment lawyer, having represented employers for 35 years.

Your closing comments accurately reflect the law in most states. A person who reasonably acts in reliance upon a promise and then suffers detrimentally because the promise is broken has a cause of action called Promissory Estoppel.

The promiser is “estopped” from rescinding the promise if the promiser knew or had reason to know that the promisee would rely upon the promise to the promisee’s detriment.

The promisee in such a case, once the proof has been accepted, is entitled to be made whole. For example, if A quits his job and then is left without work for a period until he finds comparable employment, A is entitled to Reliance Damages in an amount equal to the lost wages and benefits.

Proof is always the key issue. You were correct in advising people to obtain an offer in writing, because that simplifies the issue of proof. Finally, in some states, but not all, punitive damages can be awarded when particularly egregious behavior can be shown.

Mr. Barty agrees with me that it’s best to obtain a job offer in writing before taking any further action, like quitting your old job. But sometimes, there is no written offer. It’s made on the telephone by the employer. Mr. Barty suggests an approach that might help protect you if the telephone offer is later rescinded:

So, what can a middle management type do to protect himself if he receives a telephone offer? First, ask if a contract will be forthcoming. If the answer is negative, send an email or letter to the person who made the offer reciting the terms of the position as understood over the telephone and stating that he or she accepts the offer as set forth therein; and also ask that the addressee let him know if anything stated is wrong.

While this approach is not nearly as good as having a signed contract, it still gives the employee some legal maneuvering room. A company would be on shaky grounds to attempt to defend a lawsuit on the grounds that the telephone offer was misunderstood if it had not responded with a correcting email.

That is, if they won’t give you something in writing, you should detail your understanding of the offer in writing, and notify them that you consider that the offer unless they send you a correction.

Since employment is at will in most states, Mr. Barty says that even if you can get the employer to reinstate an offer, it can still fire you as soon as you start! What then?

Now, if an offer states your new position, your salary, and your benefits, but states that your position is at will, you can accept and form a binding contract. The trick, however, is that the contract is terminable at will — i.e., no fixed duration. So, you could be hired and fired the next day. Where does that leave a tricked employee?

Well, this is where a good attorney has to go to work. Even though the contract says at will, the company knew you were quitting your old job, selling your house and moving lock, stock and barrel from Laguna Beach, Calif., to Omaha, Neb.

Your attorney could argue that Promissory Estoppel applies and that you were entitled to a “reasonable” duration of employment. Some courts would say that an express contract renders impossible a claim of estoppel. Some would disagree and hold that the claim could go forward, subject to you proving that you did nothing to justify your abrupt firing. If you can get past summary judgment and get to a jury, I wouldn’t bet against your chances.

This topic is murky. People want to do justice, but people also have a right to rely upon rules of law.

Some readers commented on last week’s column that it would be foolish to sue an employer who rescinds an offer. Information about lawsuits is public, and it could turn up in a background investigation. I agree that an employer that finds out you did it before might decide not to hire you for fear that you’d sue them, too. But according to Mr. Barty, that might not be an issue. You don’t have to actually sue:

If you’re the out-of-luck employee, get an attorney. You don’t need to sue, but you should threaten. Don’t worry about hurting your career, because it won’t go public unless you do sue.

In other words, use an attorney to demand the job or compensation for what you’ve suffered, but stop short of an actual suit. It might also make you feel a lot better.

Another reader, Stephen Ziegler, says he once practiced law but no longer does. He advocates getting an initial consultation with a lawyer — these are usually free. He suggests it’s important to find out whether something can actually be done, before giving up. I agree. Mr. Ziegler adds a more pointed comment about people who back down because they believe nothing can be done:

I also worked as a police officer years ago and found similar experiences: “Well, the police cannot do anything, so why report it?” They are right if they do NOT report it. How are the police supposed to recover your property if you never told them it was stolen?

Lou Lesesne is a practicing labor and employment attorney in North Carolina. He suggests that it’s best to get a written contract rather than just a job offer — though there’s a catch with that, too.

In order to protect the prospective employee, he should go further and get, in writing, not just written confirmation, but a contract specifying that his employment will last for a specified period and further specifying what happens if the employer terminates it sooner. The problem, of course, is an economic one, that most employers are unwilling to enter into such agreements unless the employee has some particular skill that’s not easily found.

So, good luck with that. But it seems that the more of a commitment that you can get in writing, the better legal position you’re in if the offer is rescinded.

My own attorney, Bernie Dietz, wrote a column for my website that advocates for a big change in how we all handle employment offers. He explains why all of us — not just high-level executives — should have contracts: “Employment Contracts: Everyone Needs Promise Protection.” I think that’s the right solution for all of us. Please tell me what you think in the comment section below.

Many thanks to all the guest lawyers this week! Again, please keep in mind that nothing in this column is legal advice for a particular situation. Only your own lawyer can give you that.

Nick Corcodilos invites Making Sen$e readers to subscribe to his free weekly Ask The Headhunter© Newsletter. His in-depth “how to” PDF books are available for purchase on his website: How to Work With Headhunters…and how to make headhunters work for you, How Can I Change Careers?, and Keep Your Salary Under Wraps.

Send your questions to Nick, and join him for discussion every week here on Making Sen$e. Thanks for participating!

Copyright © 2013 Nick Corcodilos. All rights reserved in all media. Ask The Headhunter® is a registered trademark.

This entry is cross-posted on the Making Sen$e page, where correspondent Paul Solman answers your economic and business questions

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