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Last Chance Agreement Does Not Make For Cause Employment At Will

Public employees who may be dismissed only for cause possess a property interest in their continued employment which entitles them to due process before they are terminated.  Due process has both pre and post termination requirements.  Pre-termination due process requires that before final action is taken the employee be provided with oral or written notice of the charges against them, an explanation of the employer’s evidence, and an opportunity to present their side of the story.  Employers have a tendency to believe that a last chance agreement does away with all this.  To quote Gershwin, it ain’t necessarily so.

In Walls v. Central Contra Costa Transit Authority, the Ninth Circuit reviewed a last chance agreement that provided “non-compliance with the stipulations will result in your immediate and final termination” and expressly waived grievance and arbitration rights.  Acknowledging that a public employee may waive due process right the court noted that waver must be knowing and voluntary.  It went on to state that federal courts indulge every reasonable presumption against waiver and that the existence of a waiver should not be implied, presumed or lightly found. Applying these standards the court concluded, while plaintiff may have waived his right to post- termination due process, nothing in the agreement overcame the presumption that pre-termination due process had not been waived.  As the employer had provided no pre-termination due process the court reversed summary judgment for the employer and remanded for entry of judgment for the employee including appropriate damages.

This case makes clear the importance of careful wording of last chance agreements.  If the intention is to do away with hearing rights, the agreement must clearly delineate those rights being waived.  The agreement must also be carefully worded to avoid a problem opposite that address in Wall, the conversion of an at will employment into one for cause.

The full opinion can be accessed here