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The legal landscape for California employers is ever-changing.

California Assembly Bill 749 was signed into effect on October 12, 2019, and beginning January 1, 2020, California employers’ agreements with its employees settling threatened claims or lawsuits can no longer include a no-rehire provision.

What does this mean?

Basically, a no-rehire provision prohibits an employee from ever again applying for a job with the employer.

If your company has ever been involved in a lawsuit with a current or former employee, you’re likely familiar with a no-rehire provision that has been standard in settlement agreements since the beginning of time.

As an employee settles its claims with the employer, he or she agrees that they will never seek or be employed by that employer in the future.  Starting in 2020, this is no longer allowed.

Under this new law, settlement agreements cannot contain any provision that prohibits, prevents, or otherwise restricts an employee from obtaining future employment with that employer. 

Any such provision that remains in a settlement agreement created on or after January 1, 2020, will be void.

You should begin to review your settlement agreements and revise them accordingly. As you prepare for this change, get in touch with me to make sure this and everything else is looking good for you!

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