Question

When qualified applicants are scarce, recruiting becomes extremely competitive, particularly when two companies go after the same candidate, as often happens in the case of searching for professionals.  

After interviewing three shortlisted candidates, a high-tech company, Company X, made an offer to one and advised the other two candidates that they were unsuccessful.  He successful candidate was given one week to consider the offer.  The candidate asked for a week’s extension to consider the offer but was granted only an additional 3 days.  

At the end of the time period, the candidate verbally accepted the offer and was sent a contract to sign. Rather than returning the signed contract, the candidate informed Company X that he had accepted a position at Company Y.  He had received the second offer after verbally accepting the first position at Company X.  The second company knew that the candidate had verbally accepted Company X’s offer.

Before accepting Company’s offer, the candidate had consulted a respected mentor who advised him to ignore his verbal commitment to Company X and to accept Company Y’s offer.  There were no substantial differences in the salaries being offered by each company or in the work that each would expect the candidate to perform.  The candidate simply saw Company Y as the more prestigious of the two employers.

Case Questions:

1. Did the candidate act in an appropriate manner?
2. What should the candidate have done?
3. Did Company Y act ethically, knowing that the candidate had verbally accepted another offer? ( 3 marks)
4. Does a verbal acceptance constitute a legal and binding contract?
5. Should Company X take any action to enforce the verbal commitment? Should it take any legal action against the candidate or Company Y? Why or why not?
6. Describe what Company X should have done to maintain the candidate’s interest in the position.  

Answer 1

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Did the candidate act in an appropriate manner?

Research has demonstrated that job applicants who perceive that they have fewer or more choices are likely to react differently to different recruiting strategies. In this case, the applicant was decidedly inappropriate by not disclosing to Company X that he was still interviewing with other companies. If he had done so, Company X might have made its offer conditional so as to be able to continue its recruitment efforts in the event that the candidate turned down the offer. Also, it would not likely have turned down the other two applicants. This situation represents a mismatch in the perceptions of the candidate and of the organization. The organization’s inital perception of the candidate was positive, while the candidate’s perception of the organization was negative. This ultimately resulted in a rejected offer.

What should the candidate have done?

The job applicant should probably have been more direct with Company X and disclosed that he was fielding a number of offers. To gain clarification about the future direction of the company, he could also have asked Company X to provide him with more information about its plans for growth, which may or may not impact future levels of organizational prestige. Alternatively, in light of the fact that he was considering other, more attractive employment options, he could have outright declined the offer from Company X.

Did Company Y act ethically, knowing that the candidate had verbally accepted another offer?

Company Y certainly acted aggressively, and its actions might be considered by some HR practitioners to constitute a form of candidate poaching. Poaching is often considered an unethical practice in the recruitment process. However, as mentioned in the text, different candidates respond to different recruitment techniques. Further, the employee from Company Y who made the offer knowing that the candidate had already accepted the offer from Company X may have violated professional codes of conduct.

Does a verbal acceptance constitute a legal and binding contract?

Yes, verbal acceptance can constitute a legal contract under Canadian law. However, some verbal agreements may not be binding if they are replaced with written agreements, such as an employment offer or contract. Under some circumstances, organizations can also revoke employment offers after they have been made.

Should Company X take any action to enforce the verbal commitment? Should it take any legal action against the candidate or Company Y? Why or why not?

Company X is certainly entitled to pursue all available legal courses of action against the candidate and Company Y. However, the process would be time-consuming, costly and certainly not a “slam dunk” in terms of a victory in court. Essentially, Company X would have to prove that it suffered financial loss or some other detriment because the candidate reneged on acceptance. Many HR practitioners would recommend staying away from legal action in these cases to avoid wasting company resources. Instead, they might recommend improving the recruitment process to avoid similar situations.

Describe what Company X should have done to maintain the candidate’s interest in the position.

To maintain the candidate’s interest in the position after the initial interview, Company X could have done a number of things both prior to the interview and immediately following. Before the interview, it could undertake image advertising to raise its profile, thereby increasing its attractiveness to future candidates. Afterwards, it cold have reinforced its contact with the candidate to answer any questions.