Some employers use last chance agreements (“LCA”), particularly in union settings, to allow hourly employees “one last chance” to improve performance. In return, the employee waives the right to use the union’s grievance and arbitration process if later termination is due to continued failure to improve performance or due to another policy violation. Employers will explain that the employee otherwise would be terminated, but can remain employed in return for signing this “one last chance” agreement; if the employee fails to sign the LCA, the employee will be terminated for the underlying violation which led the employer to offer the LCA.
Some employers also require employees to release statutory civil rights in an LCA. As an employer recently learned, this practice is hazardous and can lead to significant liability.