I applied and interviewed for a school counselor position--I am highly qualified, have experience and fantastic references. The principal called me at 6 pm to offer me the position. I said I wanted to speak with HR to discuss the salary in the morning. The Board met that evening and an internal applicant who is NOT certified but wants the school counselor position came forward, and the board voted against hiring me--the principal called me in the morning to rescind the offer of employment. Can they hire someone who is not qualified and rescind my offer of employment? Are they not obligated to hire the most qualified applicant?
Can a district rescind an offer of employment?
Any contractural offer can be withdrawn so long as it has not been accepted. You did not accept it, so the withdrawal is legal.
Can they hire someone who is not qualified ...
That depends on the particular law that mandates the qualification.
As a general principle, anyone is allowed to work at anything unless there is a law that says “you cant do job X unless you have qualification/licence/accreditation/whatever Y.”
So you need to actually read that law. Some allow a grace period for a person to do X while they get Y and some are outright prohibitions. And there are some things that people think require a specific qualification because everybody has one but there is actually no legal requirement.
For example, I’m a qualified arbitrator, adjudicator and mediator. I need the qualification to work as the first one in australia and I it to work as the second in queensland but not new-south-wales but I don’t need it anywhere to work as the last one - most mediators have qualifications but they are not legally required. I am not a qualified lawyer because I don’t need to be to work as any of the above and, indeed, merely being a lawyer does not allow you to work as an arbitrator.
… and rescind my offer of employment?
The eligibility of the person they chose to hire has no bearing on their decision not to hire you.
If they have hired an unqualified person then that is for the relevant regulator to deal with and has nothing to do with you.
Are they not obligated to hire the most qualified applicant?
No they are not.
Employers have the discretion to choose the applicant they consider the “best”. And they can assess how your better qualifications weigh up against someone else’s past history with the organisation.
Provided they do not consider things that they are not permitted to consider under discrimination law and that the process is not corrupt, they can weight the various factors how they wish.
However, if an employer has stated that they will weight various applications is a specific way, then they have to do that.
It is highly likely that you misunderstood the principal, or the principal was mistaken, in making the offer. "Offers" from the principal / department head etc. are not generally actual offers because the principal is not authorized to make an offer, they are contingent on approval by the overseeing board. I assume the principal didn't give you a letter (which typically states the contingent nature of the offer).
The board has the sole discretion to determine which candidate is "most qualified". That candidate isn't necessarily "the one who is certified" or "the one with the longest CV". It is possible that there is a specific qualifications law in your jurisdiction, and it would matter which school district you are talking about / whether this is a public vs. private school.