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EEOC targets last-chance deals that limit employee rights

by on
in Discrimination and Harassment,Human Resources

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.

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