Playing the Hiring Game:
The Ethics of Offers and Acceptances
by Rochelle Kaplan
Question: Questions abound about the legal significance of job offers and acceptances. For example, what happens if an employer revokes a job offer after a candidate accepts it, or if a candidate reneges on his or her acceptance of an offer? Can either party force the other to live up to the agreement? Does anything change if the employer has given the prospective employee a signing bonus? Are "exploding offers"offers that expire in a very short amount of timelegal? Are they ethical?
Answer: Each state has its own laws concerning "employment-at-will," wrongful discharge, and revocation of job offers. While court decisions on many employment issues differ from one state to the next, most state courts accept the concept of employment-at-will. "Employment-at-will" means that an employer can hire a person for an unspecified period of time and discharge the person at any time or for any reason. Likewise, a candidate can accept a job offer for an unspecified period of time and resign from the position at any time or for any reason.
When an employer offers a job to a candidate and the candidate accepts, a contract for employment-at-will is created. In such a situation, should either party revoke the agreement before employment begins, the legal question becomes, "What, if any, harm results to the other party?"
So far, the courts haven't required any employer to hire a person after revoking a job offer, nor has an employer successfully sued a job candidate for revoking his or her acceptance of a job offer. One judge said an offer and acceptance means an employer and an employee are merely agreeing that the employer will provide work and the employee will show up for work. After the first day of work, either party can end the relationship. So, revoking the agreement before the first day of work would cause no legal harm to either party. In some cases, courts have permitted employees to recoup moving or relocation expenses from employers when evidence showed that an employer misrepresented a job opportunity and the candidate accepted the job and relocated based on that misrepresentation.
When an offer and acceptance specify a length of time of employment, the employer is promising that employment will be available for a specified period of time, and the candidate is promising to work that time. If the candidate reneges on this type of job acceptance, the employer will need to show that the organization was damaged by having to forgo the candidate’s services. If the employer revokes this type of offer, the candidate could claim entitlement to the salary that he or she would have otherwise received for the specified term of the contract. An employment contract must be specific and include a defined length of employment, e.g., one year. The contract should include a statement that the employee will not be terminated during that period of time unless for specific reasons. Simply including a yearly salary in a written offer does not create a contract.
Does a Signing Bonus Make the Contract Enforceable?
Accepting a signing bonus forms a legal commitment by the job candidate to work for the employer. However, the job is still employment-at-will and the employee can resign one minute after beginning work. Even if the job candidate terminates the relationship before starting the job, the employer may not be able to obtain a refund of the bonus.
Because most employment offers and acceptances are for unspecified periods of time, the creation of an enforceable employment contract based on an offer and acceptance is highly unlikely. While there may be a moral commitment to follow through with the employment relationship, especially in the case of a signing bonus, the employer and job candidate must rely on their ethical commitments to each other for the agreement to have any viability.
When Can an Offer Be Revoked Ethically?
There are times when the employer may have to revoke an offer. The employer may make an offer based on the organization’s needs and later find that the needs have changed, e.g., downsizing or withdrawn contracts; therefore, offersmust be withdrawn. The employer should let candidates know as soon as possible if circumstances change and require the employer to revoke offers. The employer should offer some type of assistance to help the student get back into the recruiting process.
There also may be circumstances that force a candidate to renege on an acceptance. A student might renege, for instance, because of unexpected family responsibilitiesa critically ill parent, for examplethat prohibits him or her from taking a job in a distant geographic location. In such a case, the student who wants to begin recruiting again should immediately notify his or her employer and withdraw the acceptance. If the student has accepted a cash signing bonus, he or she should return the bonus.
The Ethics of Offers and Acceptances
The NACE Principles for Professional Conduct document provides ethical guidance to employers recruiting and hiring students and career services professionals counseling students.
In this discussion of the ethics of offers and acceptances, the relevant sections of the Principles document are:
• Principle #10 for career services:
Career services professionals will advise students about their obligations in the recruitment process and establish mechanisms to encourage their compliance. Student’s obligations include…accepting an offer of employment in good faith [and] notifying employers on a timely basis of an acceptance or nonacceptance and withdrawing from the recruiting process after accepting an offer of employment.
• Principles #1 and #2 for employment professionals:
Employment professionals will refrain from any practice that improperly influences and affects job acceptances. Such practices may include undue time pressure for acceptances of employment offers and encouragement of revocation of another employment offer.
The Ethics of Other Recruiting Issues
The Principles document also addresses a number of other recruiting practices, such as signing bonuses and exploding offers.
There is nothing in the law that requires an employer to keep a job offer open for any specific period of time. Thus, an employer who tells a job candidate that the offer will “explode”that it will be revoked if the candidate does not respond within 24 or 48 hoursis not in violation of any law or legal standards pertaining to contracts. However, the practice is considered unethical. The Principles document notes that recruiting tactics, such as the exploding offer, that put undue pressure on and influence a student’s choices and interfere with the student’s ability to make employment decisions in an objective manner are unethical. Why? In most instances the employer is in the “power” position. An employer takes advantage of that powerperhaps unintentionally coercing a studentby putting unreasonable pressure on a job candidate.
For example, consider the student who is offered employment and is told that she will receive a bonus of $2,000 if she accepts the job offer. She is also told that the offer will be withdrawn within 24 hours. This is an exploding job offer. The Principles document warns against “improperly influencing” job acceptances using a “time pressure” issue.
As long as the student is given sufficient opportunity to consider the offer, it is not improper for an employer to offer a cash incentivea signing bonus. If the student is told that after a certain time the cash incentive will no longer be part of the offer, but that the job offer will remain outstanding for a longer period of time, the offer package does not violate the Principles document. The determination of “reasonable time frame” for accepting job offers must be made on a case-by-case basis.Offers that disappear within 24 or 48 hours usually are considered unreasonable.
Copyright Notice: This article originally appeared in the Winter 1998 issue of NACE’s Journal of Career Planning & Employment. NACE members have the permission of the National Association of Colleges and Employers, copyright holder, to download and photocopy this article for internal purposes. Photocopies must include this copyright notice. Those who do not hold membership, or who wish to use the article for other purposes, should contact Claudia Allen, email@example.com, 800/544-5272, ext. 129. Electronic reproduction of this article is prohibited.