>Mind you, an employment contract has been signed with the candidate. However, I'm not upset at the candidate because he was apologetic.

I assume you are in California? From what I understand (and I'm no lawyer, but I am an employer.) if you think that you can force someone to work for you because they have an employment contract, well, I believe you will be disappointed. "at will" employment cuts both ways.

I mean, really, the "validation of your hiring decisions" is the only rational way to look at this. Handle it properly, and you have another contact at google who speaks well of you. Handle it poorly, and, well, you just end up looking like a dick.