In Walls v. Central Contra Costa Transit Authority (9th Cir., Aug. 3, 2011, 10-15967) 2011 WL 3319442, the Ninth Circuit ruled a public employee’s Last Chance Agreement did not waive his right to a pre-termination (Skelly) hearing. Some employers use Last Chance Agreements to discipline employees and give them a “last chance.” Such agreements usually contain a provision which states if the employee violates any condition of employment, such as coming in to work late or missing a day without calling in, the employee can be terminated.
In this case, the Last Chance Agreement read in part, “non-compliance with the stipulations [of the Last Chance Agreement] will result in your immediate and final termination.” After agreeing to the Last Chance Agreement, the employee allegedly had an unexcused absence from work. The employer then moved to terminate him and did not give him a pre-termination hearing, claiming the Last Chance Agreement rendered the employee “at will,” meaning he could be terminated without just cause and the normal procedural protections that go along with it.
The Court rejected the employer’s claim. The Court recognized public employees have a property interest in their continued employment and must be provided with notice of the charges against them, an explanation of the employer's evidence, and an opportunity to present their side of the story. In reaching its conclusion, the Court examined the Last Chance Agreement and concluded “[it] specifies and modifies what constitutes “just cause” for  termination, [but] it does not otherwise alter the employment terms of [the employee’s] collective bargaining agreement [and] accordingly, there is no basis on which to conclude that he had become an at-will employee.”