Last-chance agreements are signed pacts between employers and employees that provide workers accused of serious misconduct 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 employers secure an ironclad agreement showing that employees understand the consequences.
Don't fear the legality of a last-chance agreement; courts will typically uphold them. Just make sure the details are clear and precise. The worker must know exactly what standards he or she is expected to meet. Keep the terms focused on the specific problem that led to the discharge; 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 battles. After repeated discipline, he entered into a last-chance agreement with his employer that required him to complete a treatment program and abstain from drugs or alcohol.
After he was convicted of driving while intoxicated, the company fired him. Longen sued, saying the last-chance agreement violated the Americans with Disabilities Act (ADA) and a related state law because it put different conditions on him than on other workers.
But a district court dismissed the lawsuit and an appeals court agreed. The court said all return-to-work arrangements, by their nature, impose employment conditions different than those of other 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-work conduct. In some states, employers aren't allowed to discipline employees for lawful off-work conduct. And if a worker's difficulties are related to a disability, you can't use a last-chance agreement as a way to avoid accommodation.