No-rehire Clauses: Employers Take Care!

• Jurisdiction: California,United States
• Citation: Vol. 35 No. 3
• Publication year: 2022
• Author: BRITTANY H. ROTHE-KUSHEL, ESQ.
• topic: Employment Law,Civil Procedure

No-Rehire Clauses: Employers Take Care!

BRITTANY H. ROTHE-KUSHEL, ESQ.

LOS ANGELES, CALIFORNIA

A no-rehire clause requires former employees to refrain from applying for or seeking employment or reemployment and to waive any such right. However, California employers generally need to avoid using "no-rehire" language in employee separation agreements, voluntary resignations and general releases.

In October 2019 Governor Newsom signed into law Assembly Bill 749, which added section 1002.5 to the California Code of Civil Procedure. This section affects settlement agreements, including those in California workers' compensation and employer disputes. Under this section, employers are prohibited from including no-rehire provisions in resolving employment disputes with any individual considered to be an "aggrieved person."

Code of Civil Procedure section 1002.5 applies to all agreements settling employment disputes entered into on or after January 1, 2020. Under this section, employers are, in most cases, prohibited from using "no-rehire" language in employee separation agreements, voluntary resignations and general releases.

EFFECT OF LABOR CODE SECTION 1002.5

Labor Code section 1002.5 applies to any employee who has filed a claim in these circumstances:

• Against the employer in court;
• Before an administrative agency;
• In an alternative dispute resolution forum...