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Case 1-5
Reneging on a Promise
Part A
Billy Tushoes recently received an offer to join the accounting firm of Tick and Check LLP. Billy would
prefer to work for Foot and Balance LLP but has not received an offer from the firm the day before he must
decide whether to accept the position at Tick and Check. Billy has a friend at Foot and Balance and is
thinking about calling her to see if she can find out whether an offer is forthcoming.
Question
1. Should Billy call his friend? Provide reasons why you think he should or should not. Is there
any other action you suggest Billy take prior to deciding on the offer of Tick and Check?
Why do you recommend that action?
Billy could be placing his friend in an awkward situation. The friend may not be part of the final hiring
process of the firm and could jeopardize his own career by asking about the hiring situation with Billy.
Billy may also be encouraging his friend to make promises he cannot reasonably keep or to lie, possibly
unknowingly. Just because Billy is his friend’s choice for top candidate does not mean that Billy was the
Part B
Assume Billy calls his friend at Foot and Balance and she explains the delay is due to the recent merger of
Vouch and Trace LLP with Foot and Balance. She tells Billy that the offer should be forthcoming.
However, Billy gets nervous about the situation and decides to accept the offer of Tick and Check. A week
later he receives a phone call from the partner at Foot and Balance who had promised to contact him about
the firm’s offer. Billy is offered a position at Foot and Balance at the same salary as Tick and Check. He has
NOTES
This case speaks to a dilemma that many students face. Often they do not realize that this is an ethical
dilemma. This is good example to use to discuss the consequences of their actions. Many students will
identity with being the one who lost out on an offer due to the star student sitting on many offers from the
different firms. This may also be an issue to discuss for the department to discuss with the career placement
center: should accounting firms and candidates have a uniform signing day? Firms are often dishonestly
pressuring earlier and earlier decisions and recruiting before students could know their preferences.
Ethical Issues
Firms have the right to recruit and offer jobs to the best candidates possible. Candidates have the right to
accept the job offer they like best. Candidates need a definite job to take when schooling is complete and
are scared that he will end up with neither job. Candidates have the right to know honestly from firms if
they are a serious contender for the job. The candidate could make easier decisions if he knew that the offer
was being delayed due to him being considered a “second choice” for the firm versus the firm is moving
slowly. Both the firm and candidate have a right to expect that promises and contracts made will be kept.
The candidate needs to understand that an offer is a promise but is not a contract; it becomes a contract
when accepted by the candidate.
Using the Golden Rule in determining the fairness of the situation, the firm should treat Billy as it would
like to be treated. A job candidate is ethically bound to a job offer once he has orally accepted. Normally a
company is only ethically bound by a written and signed contract. (Many CPAs remember Andersen jobs
being reneged when Enron exploded.) A job candidate who accepts an offer and then reneges harms not
only the firm, but also other students (both current and future) and the school. It is a selfish act. Career
placement centers will explain that the reason many firms quit recruiting on campus is due to candidates
accepting and then reneging on offers. Many firms today do a detailed and expensive background once a
candidate accepts so that firms are harmed when a candidates renege by needing to find another candidate
and by the expense of an unnecessary background check.
Six Pillars: Both the firm and candidate should be trustworthy, show respect, take responsibility, display
fairness and caring. In taking responsibility, both sides should think before they act and be accountable for
actable. This duty would overlap with trustworthiness of being reliable and honoring promises. Both sides
should play by the rules (do departments and career centers have a duty to help clarify the rules?) and not
take advantage of others. The firms should not pressure candidates into early acceptances which could
cause candidates to commit before they are ready and then later feel as if he has to renege. Likewise,
candidates should not play firms against each other to get the most offers or to see if a bidding war on
salary can take place. The firms and candidates should not deceive each other; the interviewing process
should be as honest as possible. Both firms and candidates suffer if the wrong hire is made.
Questions
1. Do you think it is ever right to back out of a promise you gave to someone else? If so, under what
circumstances? If not, why not?
Most people at one time or another will break a promise. When a promise is broken, one should accept
responsibility for breaking the promise, should apologize, be sincere and offer to make amends. Even
2. Identify the stakeholders and their interests in this case.
The stakeholders include Tick and Check LLP and Foot and Balance LLP; both want firms want honest,
trustworthy and diligent employees. Billy Tushoes wants a job where he can gain experience and maybe
3. Evaluate the alternative courses of action for Billy using ethical reasoning. What should Billy do?
Why?
Ethically once Billy accepted the offer from Tick and Check, he should have notified the other firms that he
was off the job market. If Billy had done that he would not have gotten the offer from Foot and Balance
and would not be facing this dilemma. When students argue that they would be extremely unhappy with
Tick and Check, then they wouldn’t have accepted if they would be so unhappy. If Billy determines that
