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Can an Employer's Last Chance Agreement Be Used as a Means of Retaliation?

Workplace retaliation refers to punishment of any kind that is doled out because an employee complains of discrimination. This type of action is often considered unlawful retaliation and is prohibited in the workplace. Retaliation can include various types of employment decisions such as demotion, termination, disciplinary actions, reduction in salary, and reassignment. However, retaliation can also take more subtle forms. For example, offering an employee a “last chance agreement” in order to save their job may seem harmless. But, depending on the terms of the agreement, it may constitute unlawful retaliation.

What is a LastChance Agreement?

A Last Chance Agreement (LCA) is offered by employers to employees who are on the verge of being terminated. They may have poor performance, have engaged in misconduct of some type, failed a drug screen, or some other situation that should lead to termination. However, the employer gives them another chance to remain employed upon certain conditions that are spelled out in the agreement. If any of those conditions are not met at any time, the employee will be terminated immediately.

Last Chance Agreements that Cross the Line

There is a case out of Illinois that demonstrates how a Last Chance Agreement can result in unlawful retaliation based on the terms of the agreement. In addition to meeting certain workrelated conditions, the agreement in that case “also required [the employee] to voluntarily dismiss his pending EEO complaints and waive his right to seek relief with the EEOC or a United States district court under federal employment statutes if Defendant disciplined or terminated him pursuant to the [agreement].”

Potential Violations of Title VII

In the Illinois case, the Last Chance Agreement required the employee to waive his rights under Title VII to bring any discrimination or retaliation claims against the employer if he were to later be terminated. The agreement also required the employee to dismiss the discrimination claim he had pending at the time. Although Title VII does not explicitly prohibit what could be considered preemptive threats of retaliatory conduct, they still fall within the protections of Title VII’s antiretaliation language. To put it another way, threatening to terminate an employee based on possible future lawsuits for discrimination or retaliation would easily discourage that employee from seeking the protections afforded by Title VII. That is unlawful.

Furthermore, the employer’s requirement that the employee dismiss his pending EEO claims was also unlawful.