Last chance agreements for NEMT drivers: when to offer one and what it should say

A last chance agreement is a signed document that gives a driver one more chance on stated terms. The company agrees not to fire the driver now. The driver agrees to specific conditions, and any breach ends the job. It sits at the far end of the discipline steps, after a positive company drug or alcohol test, a preventable crash, or a serious complaint. It works only when the problem can be fixed and the brokers you work for still allow the driver on their trips. This page covers when to offer one, what to put in it, and the legal and contract limits that apply.

When does a last chance agreement fit?

It fits when the problem is fixable, the driver is worth keeping, and no rule forces the driver off the road. Three situations come up most.

• A positive company test. A positive result on a non-DOT test, or a driver who admits a substance problem after a write-up. The ADA, state testing law, and broker rules all matter here, and the sections below cover them.
• A preventable crash. The conditions are about skill and habits: retraining, a ride-along evaluation, and a clean record for a set period. CareOregon’s provider manual lists the reasons a brokerage may require intervention training, including moving violations, a preventable collision or a series of collisions, and complaints about driving or rider relations.
• A serious complaint. The agreement states what the driver must change, how you will check it, and what a repeat looks like.

It does not fit when a broker’s rules already end the driver’s work or the conduct is a breach of trust. CareOregon’s manual lists immediate disqualification for crimes against a person, violence or theft, false program records, and violations of rider privacy. MTM’s standard agreement bars drivers with prior convictions for a sexual crime or a crime of violence. Your agreement cannot undo a broker’s disqualification. For the question of when to pull a driver first, see reasonable suspicion testing.

What should a last chance agreement say?

It should name what happened, what each side promises, how compliance is checked, and what ends the job. Write it so a stranger could decide whether it was broken.

• The event. The date, the rule broken, and the facts from the record, in neutral words.
• The company’s promise. To keep the driver employed on the dates and terms stated, instead of terminating now.
• The conditions. Each one specific and checkable: a completed evaluation or treatment program, attendance at required sessions, retraining by a set date, no further violation of the named policy.
• Testing. The tests the driver will take, who orders them, who pays, and the lab and consent rules your state requires.
• Driving status. Whether the driver is off the road, on non-driving work, or back on certain trips, and which brokers’ trips are closed to the driver.
• The term. A start date and an end date. The DOT process offers a model: at least six unannounced follow-up tests in the first 12 months back on duty, with testing allowed through the following 48 months.
• What counts as a breach and what follows. One sentence, with no further warning steps.
• Signatures and copies. Both sides sign and each keeps a copy.

As an example, a breach clause could read: “If the driver tests positive, refuses a test, or misses a required counseling session during the next 12 months, employment ends on the date the company learns of it, with no further warning steps.” Have an employment lawyer review the final wording before you use it.

Does the ADA limit a last chance agreement?

The ADA does not require one, and it does not stop you from holding a driver to the same rules as everyone else. The EEOC’s guidance on performance and conduct standards (September 3, 2008) makes five points that matter here.

• No duty to offer one. Offering a last chance agreement, which the EEOC also calls a firm choice agreement, is the employer’s choice. The ADA does not require it. Typically the company promises not to terminate, and the employee promises to get treatment, stop using, and stay out of further trouble at work.
• Same standards. The ADA lets an employer apply the same performance and conduct rules to a driver with an alcohol or drug problem as to every other driver, including rules on attendance and accidents. A driver who breaks a workplace alcohol or drug policy can be disciplined like anyone else.
• Current illegal drug use is not covered. The ADA does not protect a person currently engaged in illegal drug use, and it may protect a recovered user who is no longer using (42 U.S.C. 12114).
• A request after discipline. If a driver first mentions alcoholism after a write-up, the employer can impose the same discipline as for anyone. If the discipline is less than termination, the employer should start the interactive process on any accommodation request. In the EEOC’s example, an employee on a final written warning for lateness was entitled, absent undue hardship, to leave to enter a rehabilitation program, though the employer did not have to excuse the late arrivals.
• A breach. The EEOC says breaking the agreement usually justifies termination. Its guidance cites an Eighth Circuit decision, Longen v. Waterous Co. (2003), which treated the agreement as valid where the employee received something of value in exchange.

The ADA reaches an employer with 15 or more employees for at least 20 calendar weeks in the current or prior year, and state disability laws can add to the federal rules. For employers with 50 or more employees, the Family and Medical Leave Act can cover leave for treatment by a health care provider. It does not cover time off caused by the use of the substance itself (29 CFR 825.119). When the agreement runs through treatment, plan the schedule around that leave.

Which state laws require a chance first?

Minnesota and Iowa do, in different ways, and other states have their own testing statutes, so read yours. These two show the shape.

• Minnesota. An employer may not discharge an employee for a first confirmed positive result on an employer-requested test unless it has first offered the chance to take part in a drug, alcohol, or cannabis counseling or rehabilitation program, at the employee’s own expense or under a benefit plan. The program is the one the employer chooses after consulting a certified chemical use counselor or a physician trained in substance use disorder. Discharge is allowed only if the employee refuses the program or fails to complete it, shown by leaving early or by a positive confirmatory test afterward (181.953, subdivision 10). The law covers any employer with one or more employees. It does not apply where federal rules that preempt state testing law require the testing, except to the extent the two are consistent (181.957).
• Iowa. An employer that tests under Iowa’s statute and has at least 50 employees must write a rehabilitation option into its policy for a confirmed positive alcohol test, when the employee has worked there 12 of the last 18 months, agrees to rehabilitation, and has no earlier violation. The employer may not take adverse action during rehabilitation while the employee complies and completes it. Costs follow the benefit plan, with the employer’s share of uncovered costs capped at $2,000 in some cases. For other violations, Iowa lets an employer make enrollment in a treatment program a condition of continued employment (Iowa Code 730.5, 2026 edition).

In these states the offer is a legal step, not a favor. Check your state’s statute before you fire anyone after a first positive test. The drug testing guide covers the rest of each state’s testing rules.

What do brokers allow after a positive test?

For broker trips, the broker’s contract decides, and it can be stricter than your agreement. MTM, CareOregon, and Louisiana Medicaid show the range.

The MTM text is from its standard provider agreement, version 01.01.2023, as posted by Pennsylvania DHS. Read the version you signed, because it may differ from the posted copy. Where the broker closes the door, the agreement can still keep the driver employed on private-pay or facility rides, or in a job that does not involve driving. Write that into the agreement, and say which broker lists the driver stays off.

The DOT version for CDL and transit drivers

A driver covered by DOT testing follows a fixed path instead of an agreement of your own. After a verified positive test, an alcohol result of 0.04 or higher, or a refusal, the driver cannot do safety-sensitive work for any employer until a substance abuse professional’s evaluation, referral, and treatment process is done (49 CFR 40.285). You need not provide the evaluation or the treatment, and who pays is left to you and the driver (40.289). You need not take the driver back even after a negative return-to-duty test (40.305). If you do, the professional’s follow-up plan sets at least six unannounced tests in the first 12 months. You may not add testing beyond that plan under company authority (40.307). Keep the DOT track separate from any agreement for a non-DOT driver. The substance abuse professional entry walks through it.

Keeping the agreement in force

An agreement helps only if someone tracks it. Put the test dates, the evaluation deadline, and the end date in one place the owner checks every week, and keep the results confidential and apart from the regular driver file, as the drug test records guide explains. If the driver is off the schedule, tell dispatch the driver’s status and the date it ends, never the reason. When the term ends clean, say so in writing. When it does not, follow the breach clause the day you learn of it and use the firing guide for final pay and the broker rosters.

Moving the work in HealthRide

While a driver is off the road, the dispatch board lets you move that driver’s trips to other drivers in one motion, so riders still get to their appointments. When the driver is back on a limited schedule, credential and expiration dates sit with each driver in fleet and credentials, and every trip keeps its timestamps and signatures if a complaint ever comes up again.