If you use last-chance agreements that include an employee’s promise not to sue, understand that courts will strictly limit such a promise. The agreement can include a promise not to sue for past alleged employer discrimination in exchange for the last chance to remain employed.
However, that promise cannot be extended to any discrimination that may occur later.
The employee can still sue, for example, if the employer fires him when he violates the last-chance agreement. If the employee alleges retaliation, for example, he can claim a new discriminatory act.
Recent case: Jarrett Hamilton worked for General Electric for three decades. He had very few disciplinary problems until his last year or so on the job. That’s when his supervisors started criticizing his attendance and attitude. After a suspension, he was allowed back to work if he signed a last-chance agreement.
That agreement included two clauses: One that said Hamilton could be fired for any company rule violation, and another that said if he was terminated for violating the agreement, he promised not to sue.
All went well for a year. Then Hamilton was fired after an argument over when he could take his lunch and whether he had to return to the production line immediately.
Hamilton sued, alleging age discrimination. GE said he couldn’t sue because he had promised not to do so as a condition of getting his last chance.
But the 6th Circuit Court of Appeals refused to toss out the case. The court wrote, “[a]n employer cannot purchase a license to discriminate.” It went on to conclude that employers and employees cannot sign agreements excusing the employer from any future discrimination. (Hamilton v. GE, No. 08-5023, 6th Cir., 2009)
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