Offer rescinded after background check: Can candidate sue?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.