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Employee Last Chance Agreement Template for United States

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Key Requirements PROMPT example:

Employee Last Chance Agreement

"I need an Employee Last Chance Agreement for a sales representative who has consistently failed to meet quarterly targets and has received multiple warnings, with the agreement to start January 15, 2025, including specific performance metrics and monthly review requirements."

Document background
The Employee Last Chance Agreement serves as a critical tool in U.S. employment relations when traditional progressive discipline measures have been exhausted but termination may be premature or legally risky. This document is typically implemented when an employee has demonstrated significant performance deficiencies, policy violations, or behavioral issues, but shows potential for improvement. The agreement details specific expectations, timelines, and consequences while ensuring compliance with federal and state employment laws. It provides clear documentation of the employer's reasonable accommodation efforts and the employee's acknowledgment of the situation's severity.
Suggested Sections

1. Parties: Identification of employer and employee

2. Background: Summary of events leading to the agreement, including prior incidents and warnings

3. Definitions: Key terms used throughout the agreement

4. Terms and Conditions: Specific performance requirements and behavioral expectations

5. Duration: Timeframe for the agreement

6. Consequences: Clear statement of outcomes for non-compliance

7. Acknowledgment: Employee's confirmation of understanding and acceptance

Optional Sections

1. Drug Testing Requirements: Specific requirements for drug testing when substance abuse is a factor

2. Counseling/Treatment Requirements: Mandatory participation in Employee Assistance Program or other professional intervention programs

3. Performance Improvement Plan: Detailed metrics and goals for performance improvement

Suggested Schedules

1. Schedule A - Previous Disciplinary Actions: Documentation of prior incidents and warnings

2. Schedule B - Performance Metrics: Specific measurable goals and expectations

3. Schedule C - Company Policies: Relevant excerpts from employee handbook or policies

4. Schedule D - Treatment Program Details: Specifics of required counseling or treatment programs, if applicable

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok³ÉÈ˰æ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Clauses



























Industries

Title VII of the Civil Rights Act: Federal law prohibiting employment discrimination based on race, color, religion, sex, and national origin. Must ensure Last Chance Agreement doesn't discriminate against protected classes.

Americans with Disabilities Act (ADA): Federal law requiring reasonable accommodations for disabled employees. Last Chance Agreement must consider any disability-related factors and necessary accommodations.

Age Discrimination in Employment Act (ADEA): Federal protection against age discrimination for workers 40 and older. Agreement terms must not adversely impact older workers.

Family and Medical Leave Act (FMLA): Federal law protecting employees' right to take unpaid leave for family and medical reasons. Agreement must not interfere with FMLA rights.

National Labor Relations Act: Federal law protecting workers' rights to organize and bargain collectively. If employee is unionized, agreement must comply with collective bargaining agreement terms.

State Employment Laws: Varying state-specific regulations on employment protection, at-will employment, discrimination, and disability accommodations. Agreement must comply with state jurisdiction.

Due Process Requirements: Documentation of previous incidents, progressive discipline steps, and adherence to company policies. Essential for agreement enforceability.

Fair Labor Standards Act: Federal law governing wage, hour, and overtime requirements. Agreement conditions must not violate these standards.

Privacy Laws: Including HIPAA and state privacy regulations. Agreement must protect confidential information and medical data appropriately.

Contractual Elements: Essential components including clear performance expectations, timeframes, measurable goals, and consequences of non-compliance.

Workers' Rights Preservation: Protection of rights to legal counsel, agency complaints, and whistleblower activities. Agreement cannot waive these fundamental rights.

Company Policy Alignment: Consistency with existing company policies, employee handbook, and any applicable collective bargaining agreements.

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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