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Last Chance Agreements In New Jersey Employment Law

New Jersey civil service law and education law provide that employee disciplinary charges can be settled.  This applies to New Jersey governmental jurisdictions which are not covered by civil service or education law as well.  One of the tools which are sometimes used for these settlements are “last chance agreements.”

 

Last Chance Agreements

A last chance agreement is essentially a settlement agreement which suspends disciplinary proceedings for a specified time frame, essentially a probationary period, which gives the employee a “last chance” to improve her performance. Thus, if the employee violates the last chance agreement during the specified period the employer may impose the suspended discipline or other discipline as appropriate.  The agreement is to be construed under the normal rules for contract interpretation.  The New Jersey Supreme Court and Appellate Division of the Superior Court of New Jersey have addressed last chance agreements in separate decisions in the case of Horace Watson vs City of East Orange.  The Appellate Division also addressed the matter in the case of A.D.P. v. ExxonMobil Research and Engineering Company, in which the court examined last chance agreements and their application in private sector employment.

 

Proving and Appealing Breach of a Last Chance Agreement

In the public sector, the employer must still prove the allegation allegedly breaching the last chance agreement.  The employee thus has the right to a departmental hearing, and can appeal through the appropriate venue such as appealing to the New Jersey Civil Service Commission and Office of Administrative Law for civil service jurisdictions or the New Jersey Department of Education and tenure hearings under the TEACHNJ Act for tenured teachers and other certified education employees. In both cases, the agency decisions can be appealed to the Appellate Division and then to the New Jersey Supreme Court.  Once the disciplinary infraction, and thus violation of the last chance agreement, has been proven, the employer is free to impose the penalty agreed to in the last chance agreement.  Courts defer to the penalty agreed to in last chance agreements.

 

Protecting Against Waiving Appeal Rights

It is important to note that several unpublished Appellate Division opinions in the cases of Matter of Travis and Matter of Rice have held that an employee may waive her right to a hearing and appeal on  whether she actually broke the agreement, leaving that decision to the employer’s discretion.  It is therefore important for the last chance agreement to clearly state that the employee is not waiving her right to challenge the employer’s determination that she violated the last chance agreement.

 

The Takeaway

Last chance agreements are valuable tools which allow good employees who made one-time errors, even grievous ones, a second, albeit last chance when they might otherwise be terminated.  However, they also carry a significant risk for employees.  It is therefore essential that they are well drafted and clearly define what constitutes a breach of the last chance agreement, how long the probationary period will last, what the maximum penalty is, what will trigger that penalty, and clearly stating that the employee does not waive her right to challenge that a breach occurred.

 

Contact Us

Our New Jersey employment attorneys represent New Jersey government employees, including civil-service and non-civil service employees and teachers, as well as private sector employees in all aspects of New Jersey employment law, including negotiating and drafting employment agreements, settlement agreements and last chance agreements.  Call us at (973) 890-0004 or fill out the contact form on this page.  We can help.

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