Issue: Written "last-chance agreements" give poor-performing employees one final opportunity to shape up.
Risk: Some fear that last-chance pacts will violate the Americans with Disabilities Act (ADA).
Action: Go ahead and craft such pacts; courts will typically uphold them. Just make sure the details are precise.
If a manager is fed up with an employee's conduct, urge the manager to consider entering into a "last-chance agreement" with the employee before cutting him or her loose.
Those pacts, signed by both parties, give employees one last chance to shape up. They're common in cases involving alcohol abuse, drug abuse or chronic, and they're good for both parties.
Employees earn a chance to save their jobs, while you secure an ironclad agreement showing that the employee understands the consequences of not improving his or her conduct.
Don't fear the legality of a last-chance agreement; courts will usually uphold them. Just make sure the details are clear. The employee must know exactly what standards he or she is expected to meet. Keep the terms focused on the problem behavior; don't toss in a bunch of unrelated standards that aren't required of others.
Recent case: Ira Longen had a history of substance abuse. After repeated discipline, he entered into a last-chance agreement with his employer that required Longen to abstain from drugs or alcohol.
When he was convicted of driving while intoxicated, his employer fired him. Longen sued, saying the agreement violated the Americans with Disabilities Act because it placed different conditions on him than on other employees.
But an appeals court sided with the company, saying that all return-to-work arrangements, by their nature, impose different employment conditions on certain employees. (Longen v. Waterous Co., No. 02-3297, 8th Cir., 2003)
Final note: Check your state law before writing a last-chance agreement that limits an employee's off-duty conduct. In some states, employers aren't allowed to discipline employees for lawful off-duty conduct.
Also, if an employee's difficulties are related to a disability, you can't use a last-chance agreement as a way to avoid accommodation.
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