A Ban on Settlement Agreement No-Rehire Requirements

This law is effective 1/1/2020. It means that provisions in settlement agreements that preclude workers from obtaining future jobs with the settling employer (or related business) are invalid. There is an exception for good faith reviews by the employer that show an employee engaged in sexual assault or sexual harassment. Employers also don’t have to comply with the law “if there is a legitimate nondiscriminatory or nonretaliatory reason for terminating or refusing to rehire the person.”

The law applies to “aggrieved persons” who file a legal claim against their employer:

  • In court
  • Before an administrative agency
  • In a forum designed to handle disputes in an alternative way
  • Through an internal company complaint procedure

California places a high priority on voiding any efforts by and employer to restrain an employee’s trade -right to earn a living. As of 1/1/2020, no-hire provisions in settlement agreements, unless an exception applies, are void.

Employers also include parent companies, subsidiaries, divisions, affiliates, and contractors of the employer.

Sexual assault “means conduct that would constitute a crime under Section 243.3, 261, 262, 264.1, 286, 287, or 289 of the Penal Code, assault with the intent to commit any of those crimes, or an attempt to commit any of those crimes.”

Sexual harassment” has the same meaning as in subdivision (j) of Section 12940 of the Government Code.”

Don’t give up your rights when you sign a severance agreement. Call the Law Offices of Stephen Danz & Associates, at 877-789-9707 or use our online form to speak with an experience severance agreement lawyer.