According to the author’s important rule of thumb, so-called last chance agreements must be drafted with great care. The issues that arise in their design and in carrying them out are significant. How should these agreements be crafted and presented to employees? How do the courts regard last chance agreements? What is an acceptable duration for such an agreement? The questions are many and Donald Petersen provides the answers derived from his examination of the relevant arbitration awards.
Last chance agreements ordinarily arise as a result of a grievance settlement reinstating a terminated employee, but under specified conditions. The conditions may be the result of negotiations between the union and employer, but they may also be imposed unilaterally by the employer. Typically, last chance agreements either forbid or require certain behaviors from the terminated employee, and the failure of the employee to comply with the specified behaviors or conditions will subject him or her to immediate dismissal. Occasionally, arbitrators may also impose last chance conditions upon an employee who is reinstated as a remedy in a discharge case.