By John M. (Jack) Collins, General Counsel, Massachusetts Chiefs of Police Association, Grafton, Massachusetts; and Terrence M. (Terry) Cunningham, Chief of Police, Wellesley, Massachusetts, Police Department, and Past President, Massachusetts Association of Chiefs of Police
n an effort to rid departments of problematic officers, some chiefs are turning to the use of a so-called last chance agreement (LCA) when confronted with the prospect of a long, uncertain, and expensive arbitration process. In light of current budget restrictions, many municipal managers and political officials are encouraging chiefs to use this option to avoid legal fees and potential back-pay awards. The concept is relatively simple: In lieu of termination, an LCA may be negotiated, giving the employee who has committed serious misconduct one last chance to retain a job, provided certain specified conditions are met.1 These are written agreements signed by the employee; the union (if there is one); and the employer. In many cases the union, by encouraging the employee to sign, is saving the employee’s job.
These agreements are being used more frequently by employers and arbitrators to allow employees with serious discipline problems, particularly in the areas of drug and alcohol abuse, to continue their employment. The purpose of the LCA is to put the employee on notice that failure to abide by a certain set of employment conditions will result in some form of employment action—usually termination. Although an LCA is sometimes used with a nonunion employee, particularly where the employee has a substance abuse problem and is seeking treatment, most often LCAs are used in the collective bargaining context. Where terminations are subject to a grievance and arbitration procedure, the chief may seek to address an officer’s workplace problems by clearly delineating a set of rules through the LCA that the employee must follow to continue employment.
By giving the problem officer “one last chance,” the chief permits the employee to continue to work in return for the right to take appropriate discipline without recourse to the grievance and arbitration provisions of the collective bargaining agreement or a municipality’s personnel bylaw or ordinance.
The Arbitrators’ ViewsArbitrators usually apply different standards when an employee is discharged under an LCA. When considering whether there is just cause for discharge under such agreements, arbitrators do not apply the same due process considerations or procedural protections as they do under a normal discharge or disciplinary matter.2
According to Arbitrator William Daniel,
Arbitrators encourage such progressive programs of salvage and rehabilitation by strict enforcement of such “last chance agreements” in accordance with the terms which the parties, including the employee, have been willing to accept. However harsh or strict such terms and even though the arbitrator might well regard such conditions as unfair, that cannot be his concern.3
Some LCAs specifically prohibit the arbitrator from applying just cause standards. Most arbitrators treat the LCA as a binding modification to the collective bargaining agreement, which limits the authority to require progressive discipline or consider mitigating factors. The sole question is whether the employee violated the agreement. The only way to invalidate an LCA is to establish that
- it was not knowingly entered into by the employee;
- it is ambiguous (poorly drafted);
- it was inconsistently implemented;
- it is contrary to external law; or
- the latest offense was beyond the scope of the LCA (the underlying incident did not really happen or was not part of the LCA).
Access to Grievance ProceduresLCAs do have some limitations, and at least some courts believe that neither the union nor the employee can, by the terms of the agreement, be deprived of access to the grievance and arbitration procedure.4
From a chief’s point of view, one of the most attractive features of an LCA is the avoidance of the grievance and arbitration process should future disciplinary action be required. Ideally, the chief or the appointing authority would simply point out the violation and send the employee a notice of termination. However, in most cases an officer will at least have an opportunity to contest whether the alleged subsequent violation even occurred. This is typically the role of the grievance procedure. The officer and the union argue that all they want is the chance to refute a chief’s claim that the officer repeated the prohibited behavior. In light of the need for at least elementary due process, this seems to most courts like a reasonable request.
To avoid the problems experienced in the case of United Steelworkers of America v. Century Aluminum of Kentucky, an LCA must be carefully drafted when the employer desires to avoid arbitration over any part of an adverse employment decision for the subject employee.5 In this case, the United States Court of Appeals for the Sixth Circuit held that an employer must arbitrate the factual guilt of an employee subject to an LCA even if the LCA states that “neither the termination nor any issue of termination will be subject to the grievance and arbitration provisions of the collective bargaining agreement.” The court implied that it might have ruled differently if the agreement expressly excluded findings of fact, factual guilt, and the manner of punishment from the grievance and arbitration provisions of the relevant collective bargaining agreement.
LCA EnforcementThe LCA alters the collective bargaining agreement.6 Therefore, failing to include the union in an attempt to obtain an LCA may constitute a per se violation of the act.7 Such an agreement may even be void as a matter of law.8
In How Arbitration Works, in order to get an arbitrator to enforce an LCA, a four-step test is outlined:
- The employee must have competent union counsel while negotiating the LCA.
- The employer must tender sufficient consideration.
- There must be an ending date for the last chance status.
- There must be a clear statement of what constitutes a breach of the LCA.
The issue of competent counsel for the employee raises the duty of fair representation implications for the union as well as professional responsibility implications for the retained attorney. A union may be at risk if it cannot show that the attorney’s retention is such that the attorney can negotiate independently of the union.
Waiver of Union RepresentationArbitrators have held that an employee can waive union representation before entering into an LCA.9 Arbitrators also have held that an employee may decline union representation even when directed to obtain it by the employer. However, employees that do so are bound by whatever LCA they negotiate without union counsel.10 Moreover, arbitrators have held that unions may in fact impose their will on an uncooperative member. The union may sign an LCA, and even if the employee does not sign it, such a document has been held to be binding.11 Arbitrators have even held that the absence of a signature by both the union and the member is not an impediment to enforcement if knowledge and consent to the agreement can be shown.12
Duration of the AgreementFrom the chief’s point of view, an LCA that lasts for the remainder of the employee’s career may seem ideal. However, there is some concern that an LCA cannot last forever. Depending on the nature of the offense, it is possible that a court might rule that there must be some period of time after which, if the employee is successful, the employee has proven entitlement to return to a status equivalent to that of the other members of the bargaining unit. When drafting the LCA, it is important to show
- that there has been misconduct by the employee,
- that there is proof of that misconduct,
- that proof of that misconduct is irrefutable, and
- that the misconduct was of a type that would merit discharge.
A clear acknowledgement in the agreement that a repeat of such conduct would merit termination should help convince a court that a career-long LCA is reasonable.
ADA IssuesAn additional consideration when drafting an LCA for an employee because of a substance abuse problem is the Americans with Disabilities Act (ADA).13 The ADA prohibits discrimination against qualified employees with disabilities. While the current use of illegal drugs is not a disability, alcoholism and drug addiction can be disabilities under the ADA. The ADA also protects employees who are perceived to be disabled.
Properly drafted, LCAs do not violate the ADA. However, at least one court—the Third District Court of Appeals in Ohio in DePalma v. City of Lima, 155 Ohio App. 3d 81 (2003)—has held that forcing an employee to sign an LCA after the employer learned that the employee was seeking treatment for an addiction violated the ADA. In this case, the employee had neither performance nor discipline issues. The court decided that requiring the employee to sign the LCA was a disciplinary action taken on account of the employee’s status as a recovering addict—a status that is protected by the ADA. To avoid the potential for a similar result, employers should not require an employee to sign an LCA based on the employee’s status as a recovering alcoholic or addict. Chiefs should be sure that an employee’s conduct merits discipline, and this misconduct should be documented in the LCA.
Waiving Future ClaimsThe Sixth Circuit Court of Appeals, in the February 2009 case of Hamilton v. General Electric, determined that the provision in Jarrett Hamilton’s LCA that barred him from bringing a lawsuit to challenge the discharge was not enforceable.
We have held that “[i]t is the general rule in this circuit that an employee may not prospectively waive his or her rights under . . . Title VII.” [citing] Adams v. Philip Morris, Inc., 67 F.3d 580, 584 (6th Cir. 1995). . . . Both of the cases GE cites hold that when an individual is faced with a known violation, he or she may be able to waive his or her ability to pursue further legal action relating to that past violation. Neither case, however, stands for the proposition that, under Kentucky law, an employee can prospectively waive statutory claims relating to potential future violations.14
In Hamilton’s agreement, Hamilton got his job back on the condition that he would comply with all of GE’s rules. If any of the rules were violated, Hamilton would be subject to immediate termination. Hamilton’s agreement also contained a provision that said that if GE did terminate him, Hamilton agreed that no legal action regarding the discharge would be filed. Hamilton signed the agreement and went back to work.
Everything was fine for about a year, and then other incidents occurred which led to Hamilton’s suspension. Hamilton believed he was being discriminated against because of his age and filed a complaint of age discrimination with the U.S. Equal Employment Opportunity Commission (EEOC) as a result. When he returned to work after the suspension and after the filing of the EEOC complaint, the harassment got much worse, according to Hamilton’s testimony, culminating in his termination.
In reversing the district court, the Sixth Circuit also allowed Hamilton to proceed on his retaliation claim.
RecommendationsAs these cases indicate, municipal employers can assist their employees by offering an LCA in lieu of termination. Chiefs who decide to offer employees an LCA should consider the following:
- Has the employee committed on-the-job misconduct or otherwise performed in an unsatisfactory manner warranting termination? It is critical to identify a work-related issue. Otherwise, the entire premise for the LCA—that the employee could be terminated now, instead of being offered a last chance—will not be present. It is illegal to discriminate against an employee with a disability if that disability has not impacted the employee’s job performance.
- Does the municipality want to pay for the rehabilitation program? Chiefs should check to see if the municipality’s health insurance covers substance abuse rehabilitation—provided, of course, that the employee is on the agency’s plan.
- What will the chief do if the employee denies the existence of a problem or otherwise refuses to abide by the terms of the LCA? In such a case, the chief should be prepared to terminate the employee based on the misconduct or performance issue that led to the offer of a last chance.
- Does the LCA include a provision that gives the department the ability to monitor the employee’s attendance and satisfactory completion of the rehabilitation program? It should.
- Does the LCA contain a statement that the LCA does not alter the employee’s at-will employment status, if applicable? It should.
A sample LCA can be accessed at http://masschiefs.org/documents/SAMPLE%20LAST%20CHANCE%20AGREEMENT.pdf (accessed December 20, 2011). ■
1Baltimore Specialty Steels Corp., 95 LA 1191 (Strongin, 1990); Wacker Silicones Corp., 95 LA 784 (Hodgson, 1990); Butler Mfg., Co., 93 LA 441 (Dworkin, 1989); Southern Cal. Permanente Medical Group, 92 LA 41, 46 (Richman, 1989); S.E. Rykoff & Co., LA 233, 237 (Angelo, 1987); TRW Inc., 90 LA 31, 35 (Graham, 1987).
2Sorg Paper Co., 89 LA 1237, 1241 (Dworkin, 1987).
3Kaydon Corp., 89 LA 377, 379 (Daniel, 1987).
4Id. at 379. See also Monterey Coal Co., 96 LA 457 (Feldman, 1990); Gaylord Corp., 97 LA 382 (Goodman, 1991); Taracorp Inc., 1278 NLRB 221, 117 LRRM 1497 (1984).
5United Steelworkers of America v. Century Aluminum of Kentucky, 157 Fed Appx. 869 (6th Cir. 2005).
6Ingersoll-Dresser Pump Company, 114 LA 297 (Bickner, 1999).
7Frank Elkouri and Edna Asper Elkouri, How Arbitration Works, ed. Alan Miles Rubin, 6th ed. (Arlington, Va.: BNA Books, 2003), 972, citing James Hardie Gypsum, 111 LA 210, 215 (1998).
8Id., citing Merchants Fast Motor Lines, 99 LA 180, 183 (Marlatt, 1992).
9Id., citing Exxon Company, USA, 101 LA 997, 1103 (Sergent, 1993).
10Id., citing Tosco Refining Company, 112 LA 306, 311 (Bogue, 1999).
11Id., citing Southwest Ohio Regional Transit Authority, 109 LA 310, 314 (Murphy, 1997).
12Id., citing Western Textile Products, 107 LA 539, 547 (Cohen, 1996).
1342 U.S.C. §12111 et seq.
14Jarrett Hamilton v. General Electric Company, 556 F.3d 428,434 (2009), http://www.ca6.uscourts.gov/opinions.pdf/09a0050p-06.pdf (accessed December 21, 2011).
Please cite as:
By John M. (Jack) Collins and Terrence M. (Terry) Cunningham, "Last Chance Agreements," Chief’s Counsel, The Police Chief 79 (February 2012): 12–15.