Is Taking a Chance on the Last Chance Agreement the Best Choice?

Standardized Legal Documents Is Taking a Chance on the Last Chance Agreement the Best Choice?

Should You Give the Last Chance Agreement a Chance?

If the employee violates a company’s policy, the last chance agreement (LCA) is seen as the final effort to avoid employee termination. 

If you want to know more about the value of an LCA, you are in the right place. DoNotPay will explain the essentials of the last chance agreement and help you create many other legal documents on the way!

What Is the Last Chance Agreement?

The last chance agreement is a contract between an employer and an employee setting out terms that the employee must follow to keep their job. Employers often use the LCA with employees who:


  1. Underperform
  2. Misbehave
  3. Fail a drug test

When Should an Employer Consider Creating an LCA?

The last chance agreement is needed whenever the employee commits an infraction that can lead to termination, but the employer is hesitant to terminate the employee. An employer can have various reasons for avoiding the termination, including:

  • Not having proper documentation of the performance issues
  • Worrying about the effect of the termination on the workforce
  • Not providing the employee with the termination notice

In the best-case scenario, the last chance agreement gives the employee the message that they are valued in the company and that the manager is prepared to work with them to improve their performance. 

Drafting the Last Chance Agreement

The stipulations of the last chance agreement vary depending on the circumstances, the employer, and the violation. The general rule is to keep the LCA brief and to the point to avoid possible grievance arbitration. 

Check out the general sections that should be included last chance agreement in the table below:

Last Chance Agreement Sections Details
The basis of the agreement This section should provide a summary of the employee’s conduct and performance violations. It should also state the company policies that have been violated, such as:

  • Personal appearance at work
  • Behavior during meetings and with clients
  • Meeting the quota

The employer can also cite the disciplinary actions the company performed, including:

  • Giving a verbal and written notice
  • Issuing a termination notice for continuing violations
Expectations This paragraph should explain the exact actions that an employer expects the employee to perform to keep their job
Time frame for meeting expectations Employers should consider setting a time frame for meeting expectations to ensure the employee will achieve improved productivity faster
Consequences for violating the agreement This section should specify what will happen if the employee fails to comply with the agreement without a valid reason. The result would typically be immediate termination
Agreement expiration date Provided the employee accepts the agreement terms and complies with the company policy, an employer should release them from the agreement after a specific period

What To Consider When Creating an LCA

Many factors should be taken into account when creating an LCA. Take a look at the table below for further clarification:

Factors To Consider When Creating an LCA Description
Deciding which employees should the agreement be offered to The employer has to ensure their decision is not discriminatory in any way. The appropriate selection criteria should include:

  • Job performance
  • Seniority
  • Current business needs 
Providing accommodations for employees covered by the Americans With Disabilities Association (ADA) Individuals covered by the ADA (for example, recovering alcoholics or drug addicts) often use the protection of the ADA to impose a last chance agreement on their employers. They need specific accommodations to do their job, and employers offering LCA should consider providing them. Those accommodations include:

  • Flexible working schedules, e.g., to get regular treatment
  • Less stressful and demanding job positions
Including a waiver of rights into the agreement A waiver of rights refers to an agreement where the employer withholds the termination if the employee agrees not to file a discrimination complaint. Since the waiver of rights is frowned upon by the Equal Employment Opportunity Commission (EEOC), the employer should check with the lawyer if including it is the best choice

Use DoNotPay To Create Various Contracts and Agreements

While last chance agreements require a lawyer’s expertise, DoNotPay can help you write many other contracts without hiring an attorney or relying on contract templates

We generate legal documents of a business and personal nature that cater to individual needs and state-specific requirements.

Here is how you can get a personalized contract:

  1. Access DoNotPay from your web browser
  2. Enter the name of the document you need
  3. Give the necessary information to the chatbot (such as names, addresses, and other details)

After we create the agreement, you can fax it and get it notarized with our help! All it takes is accessing other products our app provides for the same monthly subscription price.

Which Legal Documents Can DoNotPay Create?

Take a look at the ever-growing list of legal documents you can get with DoNotPay’s help:

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