Human Resources News & Insights

Offer rescinded after background check: Can candidate sue?


Your company offers a candidate the job — then rescinds after his background check uncovers a felony conviction. He sues, claiming he was promised a job, quit his old position and bought a house in preparation to relocate. Who wins?

That’s what happened in one recent case:

A candidate, living in New Jersey at the time, was offered a job at Microsoft’s headquarters in Redmond, WA. He received a written offer letter, which stated his employment was at-will and the offer was conditional on a successful background check.

He also spoke with the hiring manager, who encouraged him to quit his current job and begin looking at houses in Washington. He recommended specific neighborhoods and gave him the name of a real estate agent to contact.

The candidate quit his job and purchased a house. However, his criminal background check uncovered a felony conviction, and he didn’t get the job after all.

He sued Microsoft, claiming the company asked him to leave his employer and move across the country under the promise of a new job.

Did manager promise a job?

Microsoft tried to have the case thrown out. It pointed to the letter, which told the candidate he would be an at-will employee and that the offer would be canceled if his background check didn’t come back clean.

But the judge didn’t buy it. The offer letter may have stated that the offer was conditional, but the hiring manager went too far in encouraging the candidate to relocate and helping him buy a house.

The company now faces an expensive trial or a hefty settlement.

The bottom line: Microsoft took the right steps in the wording of its offer letter. And the manager may have just been trying to help, but it’s best not to get involved in a potential employee’s personal affairs before the job offer is finalized.

Cite: Schley v. Microsoft Corp.

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  • Pingback: Microsoft Sued for Rescinding Offer Following Background Check()

  • Great post Sam. Ordinarily, a conditional offer should be no problem. It goes to show that being helpful can cost you in the end.

  • michelle andrean

    If the application asked a question regarding felonies etc and the applicant answered honeslty, then the offer should not have been rescinded.

  • Linda Baumann

    Did job application have a question regarding prior felony convictions? If so, did applicant answer truthfully? Most applications indicate falsification of application will be grounds for to reject candidate.

  • vickie

    Managers need to be educated on what they should/should not say, but assuming the appliant did not reveal the felony charge to the manager, I think the final decision will be in favor of Microsoft. The applicant knew or should have know that when the conviction was revealed, the offer would most likely be withdrawn.

  • Marie

    Great Story. Shows you that you need to leave business as business and nothing more. It is discouraging to know that this guy knew he had a felony conviction and did not reveal it and yet the company could possible be liable. Sometimes those check boxes can be a safety precaution too. Have you ever been convicted of a crime YES OR NO?

  • Stephanie

    I’ve only been active in HR/recruiting for six months and even I know how important that background report is regarding compliance issues. It takes approximately one week (or less) for a background report to be completed. This guy shopped and bought a house prior to the background being completed? That’s alot of time. I’m glad we don’t use the same vendor as Microsoft for our backgrounds. I cannot believe that a large company such as Microsoft would blunder in this way. I also agree with Vickie, the applicant knew that the conviction would be discovered and the offer most likely withdrawn. I find it difficult to believe that this felony information was not disclosed/discussed/revealed in an interview or on an application….


  • Lilly

    Right Vickie. My guess is that the hiring manager was really impressed by the applicant and was under the impression the background check would come back clean. I highly doubt the hiring manager would’ve been so helpful if he/she had inclination to believe it would contradict the stated information. Would he have been hired if he had disclosed the felony?
    The applicant had opportunity to bring it up, not only on the application (1), but during the interview(2) and then again in response to the written offer(3 times). He may not be proud of his past, but was perhaps not ready to be completely honest. That’s an important quality employers look for. Seems to me like his pride ruined a great opportunity and that same pride fuels his fight.
    This reminds me of what brought about the ‘good samaritan law’.

  • Dave

    Greed could also spark the manager to jump out there and provide a real estate agent referral? The hiring manager and the prospect knew or should have known that if a conviction was revealed, the offer would most likely be withdrawn. I believe it will come down to testimony concerning the hiring manager/ prospective employee dialogue.

  • Leslie

    One question is: does the type of felony really impact the job? True, the manager was helpful to a fault, but the reason for the conviction is also important. If the felony is unrelated to the responsibilities of the job, the pulling the offer just due to the felony is not a good idea. More details are needed.

  • Amanda

    This is ridiculous. The article does not state if the potential employer had the candidate sign an application answering the question “have you ever been convicted of a crime?”. If the candidate falsified the application all bets are off! IF the employer failed to ask the question, then the manager could be at fault for presuming the check would come back clear.

  • Mike

    This is an interesting article. If the candidate was asked “have you ever been convicted of a crime” and answered dishonestly, then the offer should have been rescinded. I am involved in a similar situation, but as a candidate. After a lengthy interview process, I received a written offer for an account manager position. HR established a start date and also informed me that I would be traveling overnight during the first week for training. Though I knew the offer was contingent on a background check, I put notice in at my old job to ensure I could make the start date. I received municipal citations in college related to underage drinking and disorderly conduct. I contacted the municipalities where I had the citations and ensured that I have never been convicted of a criminal offense. Knowing that offers are rescinded due to dishonesty, I checked “no” for the criminal conviction question, but added a notation saying that my response “excludes” city ordinance violations. The company called me and asked about the citations and then told me I would not be hired due to a discrepancy between my application and the background check. They said they would send me a report with the background check and the adverse action in writing. The report was never sent and now the company will not return my phone calls. On the background check authorization form, it states that no adverse action will be taken until I have the report in writing (Fair Credit Reporting Act) What can I do?

  • sam i am

    any follow up to this mike?

  • Sad and unfortunate if this case establishes precedent.

    From today on, you cannot be friendly and must suspect every employee’s motive.

    In my opinion Microsoft did everything correctly, they only got sued because of their deep pockets and lawyer speculation that is cheaper to settle than go to trial.

    Outcome of this situation would have been different if potential employee was honest and answered truthfully. You have concealment of information with malicious intent to profit while on the other end you have an innocent, eager to help manager who was “impressed” enough to hire this candidate.

    The only question here is: how long ago was this felony comitted?
    If state or FCRA laws read that employers can only go back seven years and this crime took place further back and MS employment application asked if any crimes have been committed in the past seven years, then candidate did answer truthfully.

    Sad case.