The EEOC has won the first round in a legal battle over whether an employer may ask workers to waive their rights to file future discrimination claims.
German company Cognis Corp. presented employee Steven Whitlow, who worked at its facility in Kankakee, with a “last-chance agreement” containing just such a waiver. Whitlow resigned rather than sign the agreement and then filed an EEOC complaint.
Now the EEOC is suing on Whitlow’s behalf, alleging that it retaliated against him when it fired him for refusing to sign the agreement.
Employers frequently use last-chance agreements when disciplining employees who have repeatedly violated workplace rules. Normally, last-chance agreements explain what specific behavior the employee must avoid or perform in order to stay employed. For example, an employee with a history of drinking on the job could be required to enter rehabilitation and not test positive for alcohol or illegal drugs for a year. If the employee fails any of these tests, he or she would be terminated.
The EEOC sued Cognis, claiming its last-chance agreement had the effect of conditioning Whitlow’s continued employment on giving up his right to sue the company.
When Cognis moved to have the case dismissed, a federal court not only disagreed, but stated that “there is sufficient legal support for this court to reach the conclusion that [the employer’s] threat of retaliation contained in the LCAs constitutes a retaliatory policy under Title VII [of the Civil Rights Act].”
Note: Last-chance agreements should focus on making employees productive again, not limiting their rights.
Advice: Have your attorney review any document you want your employees to sign—from employee handbooks to last-chance agreements. As this case illustrates, the pitfalls are many. The document could violate state or federal law, or could be construed as a contract binding you to keep an employee on the payroll for an extended period of time.