Job Offers During Legal Action: How They Can Affect Back Pay in Employment Disputes

When an employee is fired or pushed out illegally, recovering lost wages is often a major goal of the lawsuit. But what many don’t realize is that how an employee responds to a job offer from the employer, during litigation or settlement negotiations, can dramatically affect their right to collect back pay.

There are two common scenarios where this comes up:

• The employer makes an unconditional offer of reinstatement to the employee.

• The employer tells the employee they can reapply for a new job, rather than reinstating

them.

While both may seem like attempts to “fix” the situation, the law treats these scenarios very

differently, especially when it comes to whether the employee can continue to recover lost

wages.

What Is an Unconditional Offer of Reinstatement?

An unconditional offer of reinstatement means the employer offers the employee their old job

back, or a substantially similar one, on the same terms, with no strings attached. That means:

• Same title (or equivalent)

• Same pay and benefits

• No requirement to waive legal claims

• No probationary status or demotion

If the employee rejects a valid offer of this kind, courts generally treat it as a voluntary decision to stop the financial harm the employee suffered. Back pay (lost wages between termination and resolution) usually stops accruing on the date the offer is made.

This is a well-established principle in employment law, and it plays an important role in

negotiations. An employer may offer reinstatement not necessarily to bring the employee back, but to limit the financial damages they could be liable for.

When Refusing Reinstatement Can Cut Off Back Pay

In Thorne v. City of El Segundo, 802 F.2d 1131 (9th Cir. 1986), a female police officer sued her department for discrimination after being denied a promotion. During the litigation, the City offered to reinstate her to a comparable position.

She refused the offer, and the Ninth Circuit ruled that although she could still pursue her legal claims, her back pay ended when she declined the unconditional reinstatement.

The court emphasized that if the employer makes a good faith offer of reinstatement to the same or similar position, and the employee turns it down without good cause, the employer is no longer responsible for wages lost after that date.

What This Means During Negotiations

In settlement discussions, an unconditional offer of reinstatement can become a powerful tool for employers. If accepted, it can end the back pay claim. If rejected, it often ends the employer’s liability for ongoing lost wages.

For employees, it’s a high-stakes decision. Saying no to the offer might feel like the right choice emotionally, but from a legal standpoint, it could mean losing the right to back pay.

Of course, not every offer is legally valid. If the position is substantially worse, if the

environment is hostile, or if the offer is made in bad faith, the employee may be justified in

declining. But that’s a legal evaluation that needs to be made carefully, and ideally, with counsel.

What About Being Told to Reapply?

Sometimes, instead of offering to reinstate the employee, the employer simply says:

“You're welcome to reapply for any open positions.”

This is not the same as an unconditional offer of reinstatement. And legally, it does not have the same effect.

In EEOC v. Farmers Bros. Co., 31 F.3d 891 (9th Cir. 1994), the Ninth Circuit looked at whether an employer’s invitation to a wrongfully terminated employee to reapply for a job was enough to cut off liability for back pay.

The employer argued that allowing the employee to reapply should be treated the same as

offering their job back. But the court disagreed. It held that inviting someone to reapply is not the same as reinstating them, because it doesn’t guarantee the employee will get the job, or even be considered fairly.

The court made it clear: putting the burden on the employee to reapply doesn’t end the

employer’s responsibility for lost wages. Unlike a true offer of reinstatement, a reapplication

invitation offers no certainty and no assurance of being made whole.

So if an employee declines to reapply under these circumstances, their right to recover back pay may continue. The courts recognize that reapplication is not a true fix, it’s a request to start over.

Strategic Takeaways

For Employees:

If your employer offers you your job back:

• Take the offer seriously, it may directly impact your ability to recover lost income.

• Don’t assume rejecting it is harmless, even if you think the lawsuit will go forward.

• Get legal advice before responding, not all offers are truly “unconditional” or fair.

  
  

If you’re told to reapply instead:

• Know that reapplication does not carry the same legal consequences as reinstatement.

• Declining to reapply does not automatically end your right to claim back pay.

• Get legal advice before responding because every situation is unique.

Let’s Talk About Your Options

If you’ve been wrongfully terminated and are now being offered your job back, or told to

reapply, don’t navigate this alone. These decisions directly affect your right to recover lost

wages, and one wrong move could cost you.

At Robinson Law Offices, our Phoenix-based employment attorneys help Arizona workers

protect their rights and make smart choices in high-stakes negotiations. We know how these

offers work, how they’re used strategically, and how to respond in a way that protects your

claim.

Call (602) 888-8994 or send us a message for a confidential consultation.