Can a Prospective Employer Revoke a Job Offer After a Background Check?

Employers do not have unlimited rights when it comes to applicant background information.
Employers do not have unlimited rights when it comes to applicant background information. (Image: Jupiterimages/ Images)

Employers can revoke job offers in most cases with little or no repercussions. When the revocation is based on a background check, there are several determinants that govern whether the employer has acted in good faith when revoking the offer. Background checks are a legitimate tool in the hiring process, but they are not foolproof.

Background Check Basics

Preemployment background checks assist employers in avoiding hiring employees who are unable to perform the job, have a criminal record, falsified credentials or other potential legal pitfalls. Background screening also discourages applicants who have something to hide. There are a number of background checks that are legal for employers to use, including verifying previous employment and criminal background checks . Some require the job applicant's consent, including school records such as transcripts and credit reports. Military background checks may be implemented in some cases and also require consent.

Background Checks that are Not Permissible

Employers are not allowed to access a job applicant's medical records or to ask a job applicant about medical conditions he might have. Inquiring about an applicant's health is a violation of the Americans with Disabilities Act. Employers are only allowed to ask applicants if they are able to perform the necessary functions of the job. The Employee Polygraph Protection Act prevents most private employers from using lie detector tests for preemployment screening. There are exceptions in the EPPA, including companies that use armored car services and some positions in the pharmaceutical industry.

Revocation of Job Offers

It is not illegal to revoke a job offer based on a background check. There are cases, however, where the courts have held for the plaintiff. In the case of Mitchell Schley v. Microsoft, the court held in favor of Schley when the company revoked a job offer after finding a felony charge in Schley's criminal background check. Schley disputed the charge and provided evidence that the charges had been dropped. The company during the course of the offer had encouraged Schley to quit his current job and begin looking for housing near Microsoft's headquarters in the state of Washington. Schley placed a $30,000 deposit on a home there. After the offer had been revoked, Schley decided to complete the purchase of the home rather than lose the $30,000. He was out of work for the following two years. The court stated that Microsoft had made a "clear and definite" promise of a high-paying job to Schley and ordered Microsoft to pay damages.


Background checks are a valuable tool in recruiting and hiring. To avoid legal pitfalls, employers should avoid making employment offers until a formal application is completed and all background check information has been assessed. Extending offers before all of the necessary information has been gathered presents a legal risk while damaging a company's reputation as a good employer. Never encourage applicants to quit current positions, acquire housing or make monetary investments in the new position until all required application information is in order.

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