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A “last chance agreement” — in which an employer and employee agree that if the employee engages in a particular behavior, employment will end — is usually seen where the employee has engaged in drug use, gone through rehabilitation and is being given a “last chance” to return to the workplace. The 8th U.S. Circuit Court of Appeals recently addressed whether an employer’s last chance agreement with a drug-using employee violated the Americans with Disabilities Act in Longen v. Waterous Co., No. 02-3297 (8th Cir. Oct. 20, 2003). FIVE REHABILIATION TRIES Ira Longen was an employee of Waterous Company from 1974 through September 2000. During this time, he underwent treatment for substance abuse on five separate occasions between June 1993 and June 1996. Waterous first found out about Longen’s problem in February 1994. When Longen entered the drug rehabilitation program, he and Waterous agreed that if he completed the program successfully, he would be reinstated without discipline. This was not exactly a classic last chance agreement, given that it was more dependent on rehabilitation than on future behavior. Longen relapsed in May, 1995 and Waterous again agreed to allow him to return to work if he agreed to complete another inpatient program, coupled with an extensive after-care program. Again — not quite a last chance agreement. Longen completed his treatment during the summer of 1995 and returned to Waterous. Less than six months later, in January 1996, he again relapsed and yet again entered into rehabilitation. At this point, Longen and Waterous entered into a last chance agreement that permitted him to return to work following his rehabilitation program, but required that he “abstain from using any mood altering chemicals, including alcohol.” Longen agreed that if he violated any part of the agreement, that he would be “subject to immediate termination.” FINAL CHANCE Longen complied with the rehabilitation aspect of the agreement and returned to work. Just a few months later, Waterous found out that Longen was using cocaine. He was suspended and notified that he would be terminated under the last chance agreement. At this point, Longen’s union got involved and negotiated yet another agreement — the fourth overall — for his return. Again, Longen was permitted to return to the workplace and agreed that any “future use of any mood altering chemicals, including alcohol or violation of working rules generally related to chemical dependency will result in immediate termination � “ Longen complied with the agreement for the next four years. In April 2000, however, he was arrested for driving while intoxicated while on a leave of absence for a worker’s compensation injury. Waterous learned of the incident after Longen pled guilty to the charge and terminated his employment under the terms of the last chance agreement. Despite having agreed, in writing, that another incident would lead to his termination, Longen sued Waterous for violation of the ADA. His claim was that the agreement itself violated the ADA because it subjected him to employment conditions different than other employees. Summary judgment was granted for Waterous and Longen appealed. ADA CLAIM AS ALCOHOLIC Longen argued that he was an alcoholic or, alternatively, was perceived by Waterous as an alcoholic and that he was terminated based on this perception. The court easily dismissed this part of the argument, finding that Longen was terminated because he violated the last chance agreement. The court then considered the agreement as a contract, supported by consideration, and valid in every other respect. “All return-to-work agreements, by their nature, impose employment conditions different from those of other employees.” The court found that last chance agreements have been consistently upheld against ADA challenges and “to find now that Waterous cannot enforce the terms of the LCA would render all such agreements invalid.” This the court declined to do. Longen also contended that he could not be disciplined for using “mood altering chemicals” outside of the workplace — based on the ADA’s language that an employer “may require that employees shall not be under the influence of alcohol � at the workplace.” The court found that Longen “missed the point” as he had agreed to the provision that he would refrain from the future use of drugs, regardless of where the use occurred. This was the basis for his return to the workplace and would not be second-guessed by the court. GOOD FOR BOTH PARTIES Last chance agreements can almost always be classified as a “win-win” for both employers and employees. The employee is given the opportunity to rehabilitate his problem and to return to the workplace when otherwise his employment may be over. The employer gets an iron-clad agreement that if the employee crosses the line again, he understands the consequences. The Longen court understood, as other courts have before, that this is exactly the type of agreement that should be encouraged in the workplace. Sidney R. Steinberg is a shareholder in the business law and litigation department of Post & Schell, (www.postschell.com). He concentrates his national litigation and consulting practice in the field of employment and employee relations law and may be reached at [email protected].

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