Can an offer letter be revoked? What I’m going to talk about today is a scenario where an employer would say, I need you to sign this offer letter, and once we have the signed offer letter, then we’re going to follow up with an employment agreement. This is not a scenario where they just give you an offer letter and that’s it. There are some industries, I mean, I’m a lawyer. I know in most law firm environments, none of us sign employment contracts. Almost all of us are just at-will employees and we get an offer letter that just kind of basically goes through the terms and that’s it. Whereas in many other industries, especially healthcare, and sales, you will have an employment contract that says exactly how the employment relationship is going to be handled with compensation and benefits and termination and malpractice insurance and restrictive covenants, goes into detail about kind of the nuts and bolts of the relationship.
Today, it’s just when you get an offer letter and then they follow up the employment contract. In short, can an offer letter be revoked? Yes, it can on extremely rare occasions. An offer letter would have language that states it’s binding in some way. It is just exceedingly rare. I mean, the only time I usually see it is in academia where they don’t have employment agreements. It’s more of like a longer offer letter that then refers to a bunch of policies and procedures, but in a normal work environment, they will say, alright, let’s come to terms on the basic outline of the employment relationship. We’ll both sign the offer letter, and then we’re going to follow up with an employment agreement that goes into detail. It gets into the nuts and bolts of, for instance, if they say there’s a non-compete, well, how long is it?
What’s the geographic restriction? How many points does it attach to? Is it specific to the profession or the specialty of the professional in the situation? You’re not going to get details like that in the offer letter. Let’s just give an example. Let’s say, you’re in sales, they say, alright, let’s come to terms. You’re good on the comp, on the benefits, on the bonus structure, on the non-compete and you sign the offer letter. And then three weeks later, you still haven’t got the employment contract and you obviously have not looked for any other positions because of this, relying upon that job. But then the employer states, you know what, we’re not going to be able to go through with it currently. And then they take the offer letter away. Well, they can do that. That’s just an unfortunate part of doing business. Think of it from both perspectives.
If you signed an offer letter and then you decide to back out of a better job, moving, family concerns, whatever it is, you want the opportunity to be able to get out of that offer letter as well. And it’s going to go both ways. Either party can already decide to back out of the offer letter, assuming there’s no binding language in there, which as I said before is exceedingly rare. So, yes, an offer letter can be revoked. You don’t have to go through with it. If you’re the employer, you don’t have to ultimately offer an employment agreement. If you’re an employee, it’s bad form to sign an offer letter and decide not to go through with a job, but I would never recommend someone sign an employment agreement they’re not comfortable with. And the terms of an offer letter can look great on the surface.
And then when you get into the details of the employment agreement, it can change the way that it looks. It may state the terms of the bonus, you’ll get this much per year, but it may not say, oh, but if you terminate the contract, you won’t get any of the bonus that you earned that year or some, you know, there are details that you just absolutely can’t find in the offer letter, that once you see them in the employment agreement can really change the context of the situation. The offer letter can be revoked, but then, you also don’t have to go through with it. If you’re an employee, it works both ways. And that’s just kind of how the professional arena goes, as far as the offer letter or letter of intent is concerned.
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