Can an Employer Rescind a Job Offer Under New Jersey Employment Law?

It’s a nightmare scenario for an employee.  She has a good job, but has received the opportunity of a lifetime.  She quits her job, moves to a new city, and gets ready to start her new position.  Then, just before she starts, the prospective employer calls and says, “Oops, we’ve changed our minds.  Sorry….”  Now she’s in a new city and maybe a new state, with a new lease or mortgage, and no job.  Does the law provide her with any remedy?  Fortunately, New Jersey employment law does provide relief under certain conditions.

 

Breach of Contract

The employee is in the best position if she received an employment contract.  If she has a written contract, she has the full range of remedies for breach of contract.  This does not mean that the prospective employer does not have defenses – there may be a perfectly good reason for rescinding the offer.  For example, the offer could be for an attorney who was disbarred or a doctor who lost her license to practice medicine.  However, there is a good chance that the contract will provide the employee with a remedy in court.

Oral contracts are enforceable just as written contracts are.  The issue with oral contracts is proving that one existed, which is an evidence problem.  In both oral and written contracts, the employee must prove that all the requirements for a valid contract are satisfied, including that it had offer and acceptance, clear and definite terms, consideration (an exchange of value), and mutuality of assent or a “meeting of the minds.”  Courts have found that consideration can be found when an employee leaves her prior job in reliance on the contract for employment.

 

Promissory Estoppel

In the absence of a contract, a prospective employee may sue for promissory estoppel if she can prove that the requirements for promissory estoppel existed.  These include:

• That there was a clear and definite promise;
• That the employer made the promise with the expectation that the prospective employee would rely on it;
• That the employee did actually and reasonably rely on the promise; and
• That she suffered harm because she relied on the employer’s promise.

The Appellate Division of the Superior Court of New Jersey examined these requirements in the case of Peck v. Imedia, Inc. In the Peck case, the court ruled that an employee could sue to recover damages for promissory estoppel because she relied on the company’s job offer to quit her job, leave her apartment in Boston, move to Morristown, and lease a new apartment in New Jersey.

In a second case, Jenkins v. Region Nine Housing Corp., the Appellate Division ruled that an employee could sue for promissory estoppel based on a prospective employer’s job offer when the employer helped her lease a car it required for the job and which it knew she would not have been able afford without it because it loaned her the money for the deposit.

 

Good Faith and Fair Dealing Analysis

New Jersey employment law creates an implied agreement in employment contracts that both parties will deal fairly with each other and act in good faith so that all parties will get what they bargained for.  Even when there is no contract, however, some courts have explained that they will use a good faith analysis to determine whether promissory estoppel should apply.

 

Discrimination

Employers are prohibited from taking adverse employment actions against anyone for discriminatory reasons prohibited by the New Jersey Law Against Discrimination and Title VII of the Federal Civil Rights Act of 1964.  Refusing to hire someone is one of these prohibited actions.  Thus, employers may not rescind a job offer based on discrimination. The protection provided by New Jersey’s Law Against Discrimination is more extensive than Title VII, and prohibits discrimination because of an individual’s religion, creed, race, nationality, ancestry, color, national origin, age, gender, pregnancy, marital or domestic partnership or civil union status, family status, creed, gender identity, sexual orientation, and expression, genetic information, atypical hereditary cellular or blood trait, liability for military service, and mental or physical disability (including perceived disabilities), and AIDS and HIV status.

 

Contact Us

Our New Jersey employment lawyers represent both employers and employees in all aspects of New Jersey employment law, including employment contracts and rescinded job offers.  Please fill out the contact form on this page or call (973) 890-0004 to schedule a consultation with one of our New Jersey employment attorneys.  We can help.