What is a Last Chance Agreement?

In today’s job market, job security is at the forefront of everybody’s mind. The existence of opportunities such as a last chance agreement are seen as a blessing by some, while others view them as a readily abused caveat. The term refers to an agreement, most often made between an employer and a union-represented employee, which allows an individual who has committed a serious violation against company policy to have one “last chance” to keep their job. The stipulations vary widely depending upon the employer, the infraction, and a variety of other circumstances.

Violation of a last chance agreement is typically grounds for immediate termination, regardless of union stipulations which might normally apply. Considerable effort is put into the wording of these agreements, in order to avoid additional arbitration.

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The Agreement is Brief and To the Point

In order to minimize the chances of additional arbitration and potential misunderstandings, this type of agreement is typically very short. It is often a general statement of consent, on the part of an employee, that they committed a serious breach of policy. It is followed by their signature, avowing to make improvements with regard to their observance of policy in the area specified. The infraction which led specifically to the agreement being drafted is described in detail, but the overall appearance of most forms is comparable to that of a written warning at most entry-level jobs.

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The Body of the Agreement

What sets last chance agreements apart from other disciplinary forms is the specific assertion that meeting the terms of the agreement is required in order to retain employment. After the infraction committed by the employee is printed, specific policies may be quoted, and specific actions to be taken by the employee with regard to preventing future violations may also be clearly stated (procedure here differs markedly from one company to another). Generally speaking, any future need for disciplinary action within a particular period of time will result in termination, thus no specific disciplinary measures are usually included.

Disclaimer and Stipulations

There will usually be a concluding portion to one of these agreements, which asserts that the employee must remain focused on all aspects of company policy, and further asserts that the employer retains the right to terminate the employee if there is any violation of any policy, including those not specifically relevant to the previous infraction. Depending upon the nature of the violation which has already occurred, there may be additional elements to this concluding portion of the agreement, such as specific actions to which the employee is expected to adhere (or to avoid), usually for the duration of a specified probationary period.


The agreement takes the form of a written contract; an employee will be expected to sign it, and to print their name, recording the date as well. Their immediate supervisor, and a human resources representative — typically a director of human resources, depending upon the size of the company — will witness the signing, likewise signing and printing their names, and confirming the date on which the agreement was filled out.

A last chance agreement is a disciplinary measure, but — when used fairly — they can be an opportunity to restore a damaged relationship. From the perspective of the employee, it is a chance to retain their job. From the perspective of the employer, it is a chance to show leniency, and retain the employment of a skilled worker.