California passed several very interesting new bills that went into effect on January 1, 2020. While much has been talked about regarding AB 5, several other new laws will also help strengthen worker protections and rights. For example, AB 749.
This law, which took effect at the beginning of the year, bans “no re-hire” provisions in settlement and severance agreements. Commonly, either when settling a dispute or separating an employee, an employer will try to include a provision in the agreement that allows the employer to refuse to re-hire the employee ever again. For larger corporations or public entities, or companies that are in the business of acquiring other companies, this can really restrict the employee’s future career. Now, these “no re-hire” provisions are unlawful, and not just when used by the employer, but also by “any parent company, subsidiary, division, affiliate, or contractor of the employer.”
The only exception to this law is where the employer makes a good faith determination that the employee has engaged in sexual harassment or sexual assault—in this case, a “no re-hire” clause is allowed.
Kosinski and Thiagaraj, LLP frequently assists employees negotiate severance agreements, with an eye to ensuring all terms are lawful and fair. AB 749 is a welcomed step to giving employees a fair opportunity to pursue their career, even if they enter into a severance agreement along the way! Check out our services here.