Despite recent increases in job openings and drops in unemployment benefit claims, the U.S. labor market remains tight as companies in many industries continue to hold on to workers, remain prudent with hiring and lay off employees. For frustrated job seekers, many employers are also starting to rescind employment offers, leaving the newly hired suddenly out of a job and in the lurch.
Last year, large firms such as Carvana, Peloton and Robinhood laid off staff, according to CNBC, and crypto king Coinbase laid off 18% of its total workforce amid concerns of decreased trading and a “crypto winter.” Within this protective corporate thinking, aside from simply being let go, new workers stand a chance of getting offered positions, then having those new jobs rescinded by prospective employers.
As the Los Angeles Times reported, companies opting to rescind employment offers fall far behind those choosing to lay off workers; they’re not common enough to be tracked by the Labor Department. But if the economy tips into a recession, we could very well see this practice of hiring, then revoking, job offers on the rise.
“If the economy is where people think it’s going to be and we’re in the middle of a meaningful recession, I would expect you’ll see an impact to graduating college students and business school graduates,” said Dan Kaplan, a senior client partner at management consulting firm Korn Ferry.
However, Sid Upadhyay, co-founder and CEO of the recruiting company WizeHire, stated that it would be “highly unusual” for the market to swing from increased hiring to rescinding offers.
“Broadly speaking, we’re seeing rescinded offers in a minority of cases,” he told CNBC. “There are still hundreds of thousands of new jobs in the market, and most organizations extending offers are resilient and profitable companies.”
What Should You Do If You Quit, But Your New Job Also Dumped You?
But it happens, which prompts the question: What should you do if you’ve already quit your old job and you get your new job offer rescinded?
According to the legal experts at The Lacy Employment Law Firm (LELF), you have options depending on where in the quitting and hiring processes you are, which will put you in good stead for moving on from an unexpected unemployment situation.
Many job offers are quashed through the application process, namely, if you failed a step or contingency like a criminal background or credit check. The only way to pass these contingencies is to come right out and ask your new employer what you need to do to have your offer accepted. If possible, do not give notice at your current job until you know what you will need to prove to be hired officially, and don’t be pressured by your new employer to make a quick decision.
According to LELF, there are many reasons a written job offer could be annulled, including not divulging conflicts of interest, not handling the offer correctly (by upsetting your new employer with a demand or negotiation after accepting a job offer), a suddenly weak economy and, simply put, not being the person they want for the position.
Upon the withdrawal of a job offer, LELF advised to always try to patch things up with your current employer, even if you have given notice (unless you are dead-against returning there). Of course, if you have given notice, your employer may not want you back. They have no obligation to keep you on and can fire any employee for a non-discriminatory reason.
But you should broach the subject regardless. Your old or current employer may have regretted losing you, and despite the number of available jobs out there, some employers have a hard time finding and keeping workers.
As far as recourse against an employer rescinding your job offer is concerned, there is very little to do besides look for another job. Job offers are not contracts and, as such, don’t hold legal promises between two parties.
But, per LELF, the only way you may have a claim against the new employer is if you relied on the offer and the employer reneged on it. Or if you sold your house and car to accept the job offer, you could potentially file for damages through the practice of promissory estoppel. However, that would be a rare case, and predicting how it might turn out, like most things in life, could prove to be fruitless.
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