New company gave me a job offer, but doesn't want the contract signed until my first day. Should I be worried?

Question

I am currently working at company A. I got a job offer from company B after 10+ hours of interviews, references, a thorough background check, many conversations with HR etc. I am planning to give my boss at company A my two-weeks notice, take a couple weeks off and then start at company B.

Company B has sent me an offer letter, employment agreement (with comp detailed), benefits package etc. Additionally, they have given me confirmation over the phone and email (when I asked) that we both accepted this offer/agreement. Company B is 1000+ employees, well-known and has an excellent reputation in the industry. However, I'm told it's company policy that the agreement isn't actually signed by either party until my first day.

I've never experienced something like this before. Is this a red flag? Should I be pushing back? Does a signature offer any additional protection at all? What possible reasons could they have for this policy?

If it helps, I live in the USA and this is a US based company I would be working for.

Any help is appreciated, thanks!

Edit: As asked in the comments below, all of the above conversation was had via email and phone call with my contact at HR. However, HR and all the other members of the team, future boss, boss' boss etc. have made it very clear they are excited for me to join. I've spent hours chatting specifics with some of these people. I received 15+ pages detailing all the exact contract specifics and this is the one we will sign. Everything but the signature issue is seemly great! However, I just don't see any legitimate reason why they want to wait...

Answer 1

Update: Based on all the feedback I've been getting, I've toned down my original answer. See my addendum near the bottom.

This is what I would say (of course, please use your own words):

I'm sorry. If I was unemployed, I would definitely wait for my first day to sign this contract.

However, since I'm currently gainfully employed and since I am required to give 2 weeks notice. I just see no reason to commit myself to you without a binding commitment from you as well. If this means that I'm not the right hire for you guys, that's perfectly fine.

In other words, point out your situation, show that it doesn't make sense for you, and show that you're willing to walk away from them if your concern is not alleviated. And yes, taking this stance may mean that you lose the job.

And be sure to send that email to both the HR recruiter and the hiring manager. The hiring manager is the one who actually wants to hire you.

Update: With that said, you may want to look at the entirety of the situation.

If this is really a good company, if the offer is really good, if there are no red flags on Glass Door, if the HR recruiter hasn't tried to unnecessarily delay your recruitment or starting date, if there is no negative news in the financial press, either regarding the company itself or the industry it's in and if by all indication, the company should be doing well even during a pandemic.

You may want to avoid giving them any kind of ultimatum, in which case, you should still ask for what you want, but avoid using the last one or two sentences I wrote in the message I suggested.

Answer 2

I don’t think this is a big deal.

If you are a permanent full time employee in the US, in my experience it’s pretty usual to get a written job offer, accept it in email, but not actually sign anything until you get a W-9 on day 1. There is basically no legal difference between a signature and the clearly extended and accepted offer you have performed in email. In fact, usually the only company paperwork that gets signed is stuff like IP agreements, direct deposit, and “I have received the employee handbook.”

Answer 3

Short answer: YES you should be worried and try to secure the contract ASP.

Long answer: It is gonna be fine most likely. Most likely there won't be any issue. Just sign on the first day.

Not likely but has happened many times too: The company eventually decides not to hire you, even if verbally agreed. Not often but I know some real cases this happened.

Bottom line: Try to get a signed contract.

Answer 4

Sorry, but unless the offer letter is signed then you do not have secured employment, period.

You are right to be worried because neither company has your best interest in mind.

If company B rescinded after you put in a two-week notice then do you personally have enough capital to sue them for damages which arose from an unsigned offer letter?

From https://www.recruiter.com/i/how-to-resign-from-your-job-to-take-up-a-new-post/

The golden rule for resigning to take up post in a new job is not to resign until you have a written job offer in your hand, which includes a start date and details the salary and all the pertinent benefits and perks. IF POSSIBLE, DON'T RESIGN UNTIL YOU HAVE A COMPANY SIGNED EMPLOYMENT CONTRACT. A verbal offer is not enough; you want to be totally sure of commitment from the employer – and that all the correct internal hiring approval procedures have been executed.

Also see https://workplace.stackexchange.com/a/149409/17532

I am not saying they plan to screw you over nor that they will act upon a chance to screw you over but take this quote to heart: "The best-laid plans of mice and men often go awry."

Answer 5

I don't see a problem here.

It could be as simple as they want to see you actually put your wet signature on the paper. This is why presidents sometimes sign documents in signing ceremonies, and not in the garage of their vacation home. It gives the process an air of gravitas.

I personally like the process they've established. They sent you the contract in advance, so that you had time to look over it. You stated that all of the contacts you've had with them have been via email or phone, so it sounds like you haven't met each other yet. They just want a little face to face time before the final "handshake," that's all.

Answer 6

(Update Below: Start Date is everything, do you have one yet? I'd worry more about that than a contract)

To my knowledge, a contract is binding even without a signature if no other contract was offered afterwards, neither party objected, and both parties moved forward as though the contract had been agreed to.

If you have (or they have) recording of the agreement verbally on the phone that's all the better.

But I wouldn't worry - If they've gone so far as to send you the offer in writing, and you said yes on the phone, I would say you have a strong argument if they later rescinded it.... in that they sent you a contract and you agreed to it. Not to say they couldn't try to get out of it, or that it would be worth disputing if they did, but it's not something I'd worry about.

It's likely just a company with a shitty/ignorant policy in that area. Do be suspicious, and be on the lookout for other red flags, but I personally wouldn't raise a stink about this issue to anyone at the company after they said they won't sign until day one.... If you are concerned though, I'd check on their reviews at sites like glass door and see if anyone got ripped off. And then maybe float your resume to some additional places as a hedge just to feel confident, but overall I'm sure it's fine.

Most companies, they want to get a position filled quickly and for the best(least) amount of cost for a good candidate.

If I make an offer, unless you're my second or third choice and someone that previously backs out becomes available again, it's likely not going to be rescinded (for example.... what kind of liability does that open the company to about potential discrimination if it turns out the candidate was in a protected class?). Even if a better candidate that rejected earlier suddenly becomes available, they're then in doubt as to whether they really would stick out the job at that point. If an offer has been made and you've accepted I would put 90% odds you'll be there on day one

Update: As I rethink this, whether you have the contract or not, I would recommend not considering the job firm until you've agreed on a start date.

Once you've settled on a start date, I would consider the job 100% sealed unless the job is overall eliminated or some other extranneous issue occurs where they can't hire someone in general anymore.

Answer 7

It's hard to answer for sure without knowing the industry, as customary practice varies significantly by industry in the U.S., especially if you would be part of a unionized workforce.

However, on average, U.S. employment situations don't have a signed employment contract at all, either before or after beginning work. There is frequently some kind of agreement regarding intellectual property rights, non-disclosure, not using company resources to your own personal advantage, and that sort of thing, but this does not constitute an employment contract and it has nothing to do with your compensation, work hours, etc.

As such, not having a signed employment contract before starting is the default case in the USA and is typically no sort of red flag or cause for concern at all.

It is, however, advisable to review any agreements that they may require you to sign as a condition of employment prior to giving notice at your current position to make sure that it's something you can agree to or, if it isn't, to try to work out whether the terms can be changed to acceptable ones. While it's unusual for a company to be willing to change the terms of such an agreement except for the highest-level positions, I've actually had it happen to me personally before (i.e. company changed terms of agreement per my request before starting,) so you never know until you ask.

Answer 8

After reading the answers already I'm not sure there's a complete picture here.

First, an offer letter is legally binding. If they give you an offer letter and do not present you with a contract to sign or otherwise do not hire you, then you would easily win a claim against them for damages. And if they're a big company, they know this and would not do this, as it's just not in their financial interests to do so.

That being said, you WILL be signing this contact at some point. I'm assuming that since you received the employment agreement that you've read it and you would be willing to sign THAT document. You will need to ensure the document they present is the document sent you before. It may, depending on the terms and how well you understand them, worth your while to run it past a lawyer.

Now, according to the terms of your agreement, once you sign it, you will probably have a few things you might need to be concerned about. There will be any number of reasons they might let you go and you should be aware of these and make sure you have confidence that they won't do one of those.

But there are no guarantees. You could get there and last a week and absolutely hate it. Do you have the funds you need to survive until you get another job? Would your current job take you crawling back?

On the surface, however, this is entirely normal. Sending an offer letter is a legally binding commitment from the company and there will be a job for you if you choose to accept it.

Answer 9

Not signing a contract before tendering your resignation can actually be advantageous if you're open to counter offers by your current employer. If you are leaving to make more money, your employer may offer more money on the spot to keep you. They may also be amenable to other changes like allowing work from home, or other benefits.

And as others have said, in at-will states, an employment contract doesn't mean much. They can change the terms or terminate you from day one.