The Federal Employee's Lifeline: Understanding Last Chance Agreements (LCAs)

Navigating a proposed removal from federal service can be a daunting and career-threatening experience. For many federal employees facing an adverse action, a Last Chance Agreement (LCA), sometimes called an Abeyance Agreement, can serve as a vital tool to preserve their employment.

What exactly is an LCA, and why is it so crucial for federal employees and their agencies?

What is a Last Chance Agreement (LCA) in Federal Service?

A Last Chance Agreement is a settlement between a federal employee (or former employee) and their agency. It provides the employee with an opportunity to retain or return to federal employment, typically when the agency would otherwise proceed with or has already executed a removal action.

LCAs are a form of alternative discipline. They are often considered when an employee's response to a proposed removal is persuasive, leading the deciding official to believe the employee deserves another chance, particularly if they have an established history of good performance.

Why Agencies Offer LCAs

For the agency, offering an LCA is a strategic move to:

• Reduce risk and expenditure: It helps the agency avoid the cost and resources needed to defend the adverse action upon appeal.

• Avoid backfilling costs: Preserving an experienced, otherwise high-performing employee saves the agency the expense of hiring and training a replacement.

• Maintain order: The agreement sets clear terms for future conduct, allowing the agency to maintain discipline.

The Critical Role of Appeal Waivers

A core component of most LCAs is the waiver of appeal rights. In exchange for the "last chance" to keep their job, the employee agrees to waive their right to appeal the underlying adverse action.

🚨 Special Note on Appeal Waivers: It is a well-established legal principle that government employees may waive their right of appeal in exchange for a last-chance opportunity. Despite some union officials’ beliefs, this practice is permitted and legally sound.

See: Smith v. Department of Veterans Affairs, 106 LRP 10546 (Fed. Cir. 2006) and Stewart v. U.S. Postal Service, 91 FMSR 7004 (Fed. Cir. 1991).

If an agency takes a personnel action pursuant to an LCA where the employee waived their right to appeal, the Merit Systems Protection Board (MSPB) generally lacks jurisdiction over the matter. This makes breach of an LCA extremely difficult for an employee to contest.

🔑 Key Practical Points About Last Chance Agreements

Key Point	Description
Duration	Typically lasts one to two years.
Breach of Terms	If "actionable misconduct" occurs during the LCA period, the employee can usually be removed without further notice or process.
Waiver Requirement	A waiver of appeal is required in most cases.
Agency Obligation	The agency is not required to equally apply the opportunity for an LCA to all employees.
Prime Candidates	Higher performing employees are prime candidates, provided the allegations are not egregious (e.g., sexual misconduct, workplace violence, embezzlement).
Jurisdiction	It is extremely difficult for an employee to assert MSPB jurisdiction if they are removed for breaching the LCA terms.

The Imperative of Early Engagement

For federal employees facing a proposed removal, it is essential to explore the applicability of an LCA as early as possible, ideally at the proposal stage. It is far better and more cost-effective to reach an interest-based solution (the LCA) than to engage in a protracted and expensive appeal process. Offers for an LCA, if applicable, should be incorporated early into the written response to the proposed adverse action.

Negotiating Your LCA

An LCA is not unilaterally produced; it requires the active participation and agreement of the affected employee. The employee should be prepared to engage with the agency representative to craft the language of the agreement.

A Note on Union Involvement (where applicable): While unions may offer representation, the right to choose a representative or represent oneself belongs to the employee. If a union representative becomes an obstacle to accepting a reasonable LCA, an employee has the right to intervene and accept the terms to protect their job. We have actually seen this issue happen.

Need Assistance?

Responding to a proposed adverse action and negotiating the complex terms of a Last Chance Agreement requires specialized knowledge. Don't face this critical career juncture alone.

If you require assistance with responding to a proposed adverse action or negotiating a Last Chance Agreement, please do not hesitate to contact us. All initial consultations are without charge or obligation.