Summary: A Last Chance Agreement is appropriate when the grounds for discipline are repetitive violations of policy or workplace standards, because it affords employees an opportunity to save their jobs by correcting deficiencies. However, it should not include include an overly broad and legally unenforceable waiver of future rights under the federal anti-discrimination laws.
The premise of the civil jury system is that jurors decide the facts and judges rule on the law. At trial, jurors listen to conflicting evidence, evaluate the credibility of the witnesses and review documentary evidence. The judge then instructs the jury on the parties' respective legal rights and responsibilities, and the jurors render a verdict by applying the law as stated by the judge to the facts they alone determine. Either party may make a pre-trial motion for summary judgment and avoid trial if there is no dispute about the material facts and a party is entitled to judgment as a matter of law. A judge may throw the whole case out, or limit the trial by determining who is liable as a matter of law and then directing the factual issue of damages to a jury to decide.
Most employment discrimination cases focus on fact-driven issues: who knew what, and when they knew it; what actions were taken; whether complaints were ignored; and what policies (if any) were applied. Determinations of intent and witness credibility are paramount. Ambiguities in documentation are also a common basis for judges to send the case to a jury to weigh the evidence and determine what actually happened. Yet, on May 23, 2012, in a retaliation lawsuit brought by the Equal Employment Opportunity Commission (EEOC), a Federal judge ruled as a matter of law that a multinational chemical company unlawfully retaliated against an employee with 19 years of service when he refused to waive his rights to file a discrimination charge.
It was undisputed that Stephen Whitlow was disciplined for numerous performance related issues. He received verbal warnings, a disciplinary suspension, and even a formal counseling session. In lieu of termination, he was presented with a Last Chance Agreement (LCA), which explained that he was receiving a final opportunity to comply with all requirements in order to keep his job. If his performance or behavior lapsed again, he would be terminated immediately.
As a condition of his continued employment, the Last Chance Agreement also prohibited him from filing a discrimination charge with the Equal Employment Opportunity Commission — even a charge based on conduct that might occur in the future. When Whitlow refused to be bound by that agreement, the company fired him. The Judge concluded that the company retaliated against Whitlow because he refused to be stripped of his rights.
The court noted, "It is not often that a plaintiff moves for or is granted summary judgment on a Title VII retaliation claim." The judge ruled that no jury could reasonably conclude that the employer did not unlawfully retaliate against Whitlow when it fired him, and that its argument to the contrary "defies simple logic." The only issue now remaining for trial with regard to Whitlow is the amount of damages due to him. He can seek compensation for lost income and emotional distress and punitive damages.
The Equal Employment Opportunity Commission's lawsuit also charged that a class of employees who signed similar last chance agreements was also retaliated against because the company forced them to choose between termination and signing agreements that stripped them of protected rights — or at least deterred them from exercising those rights.
The court held that a jury could conclude that the company engaged in unlawful anticipatory retaliation against the class when it required those employees to waive their right to file charges of discrimination out of fear that they might seek to enforce those rights. The court noted that the language of the agreements supported the inference that the company acted unlawfully out of just such a fear "because fear of such protected activity seems to be one of the only reasons for placing the retaliatory provision" in the last chance agreements.
The court denied the Equal Employment Opportunity Commission's summary judgment motion for class members who signed last chance agreements but were not actually terminated. The class action claims will proceed to a jury trial.
A Last Chance Agreement is appropriate when the grounds for discipline are repetitive violations of policy or workplace standards, because it affords employees an opportunity to save their jobs by correcting deficiencies. The problem here was the overly broad and legally unenforceable waiver of future rights under the federal anti-discrimination laws.
Patricia S. Eyres ("Patti") calls herself a "recovering litigator," who knows first-hand the value of paying attention to prevention. After spending 18 years defending companies in the courtroom, she resolved to help business leaders recognize potential legal landmines before they explode into lawsuits.
More articles, videos, and podcasts by Patricia Eyres:
Thorny FMLA Eligibility Issue: Counting Hours Worked To Meet the 1250 Hour Threshold
Involuntary Reassignments And Transfers As An Unlawful Employment Practice
Employer Alert: 2013 Legislative and Regulatory Expansion under California FEHA
Performance Evaluations Without Pain ... And Without Lawsuits
Trucking Company Pays $450,000 to Settle Fresno Workplace Discrimination Case
Insurance Thought Leadership exists to "simplify the complex." The insurance industry is fraught with complexity so our defining vision is to aggregate and deliver best practice solutions from highly respected experts in their field. Insurance Thought Leadership provides knowledge and experience at a time when its needed most, times of sweeping change and market uncertainty.
Whether it's Healthcare, Worker's Compensation, Property & Casualty, Auto, Sophisticated Life Insurance designs, Directors & Officer's, Safety, Risk Control or other Claims Management, Insurance Thought Leadership promises to deliver the most relevant mind share the industry has to offer, thus our defining vision … to "simplify the complex."