Excited states of $^{38}_{17}$Cl$_{21}$ were populated in grazing reactions during the interaction of a beam of $^{36}_{16}$S$_{20}$ ions of energy 215 MeV with a $^{208}_{82}$Pb$_{126}$ target. The combination of the PRISMA magnetic spectrometer and the CLARA $gamma$-ray detector array was used to identify the reaction fragments and to detect their decay via $gamma$-ray emission. A level scheme for $^{38}$Cl is presented with tentative spin and parity assignments. The level scheme is discussed within the context of the systematics of neighboring nuclei and is compared with the results of state-of-the-art shell model calculations.