{"id":10936,"date":"2026-06-11T19:31:14","date_gmt":"2026-06-11T19:31:14","guid":{"rendered":"https:\/\/usatrustedlawyers.com\/blog\/new-california-law-prohibits-use-of-no-rehire-provisions-in-certain-settlement-agreements\/"},"modified":"2026-06-11T19:31:14","modified_gmt":"2026-06-11T19:31:14","slug":"new-california-law-prohibits-use-of-no-rehire-provisions-in-certain-settlement-agreements","status":"publish","type":"post","link":"https:\/\/usatrustedlawyers.com\/blog\/new-california-law-prohibits-use-of-no-rehire-provisions-in-certain-settlement-agreements\/","title":{"rendered":"New California Law Prohibits Use of \u201cNo-Rehire\u201d Provisions in Certain Settlement Agreements"},"content":{"rendered":"\n<div id=\"contentSummaryCollapse\" style=\"--intro-p-height: 10.3125rem;\">\n<div class=\"inner-collapse\">\n                        <strong>Overview<\/strong><br \/>  As of January\u00a01, 2020, California law limits an employer\u2019s ability to include a \u201cno-rehire\u201d provision in agreements settling employment disputes.\u00a0 Under this new law, absent certain specified circumstances, California employers cannot include any clause that prohibits, prevents, or otherwise restricts the settling-employee from working with the employer or one of its related entities in the future.\u00a0<\/p>\n<p><strong>AB 749 <\/strong><br \/>In October\u00a02019, Governor Gavin Newsom signed into law Assembly Bill 749 (\u201cAB 749\u201d), which adds Section\u00a01002.5 to California\u2019s Code of Civil Procedure and affects agreements settling employment disputes.\u00a0 AB 749 specifically \u201cprohibits an agreement to settle an employment dispute from containing a provision that prohibits, prevents or otherwise restricts a settling party that is an aggrieved person, as defined, from working for the employer against which the aggrieved person has filed a claim or any parent, company, subsidiary, division, affiliate, or contractor of the employer.\u201d\u00a0 Cal. Civ. Code \u00a7\u00a01002.5(a).\u00a0 The bill defines an \u201c[a]ggrieved person\u201d as someone \u201cwho has filed a claim against the employer in court, before an administrative agency, in an alternative dispute resolution forum, or through the employer\u2019s internal complaint process.\u201d\u00a0 <em>Id.<\/em> \u00a7\u00a01002.5(c)(1).\u00a0\u00a0\u00a0<br \/>\u00a0<br \/>AB 749 does not prohibit employers from including a \u201cno-rehire\u201d provision in (1) a settlement agreement with an employee whom the employer, in good faith, has determined engaged in sexual harassment or sexual assault (<em>see<\/em> <em>id.<\/em>\u00a0\u00a7 1002.5(b)(1)(B)); or (2) a severance agreement that is unrelated to a claim filed by the employee against the employer.\u00a0 <em>See<\/em> <em>id.<\/em>\u00a0\u00a7\u00a01002.5(b)(1)(A).<br \/>\u00a0<br \/>AB 749 expressly provides that an employer is not required to rehire a person \u201cif there is a legitimate non-discriminatory or non-retaliatory reason for terminating the employment relationship or refusing to rehire the person.\u201d\u00a0 <em>See<\/em> <em>id.<\/em>\u00a0\u00a7\u00a01002.5(b)(2).\u00a0<br \/>\u00a0<br \/>AB 749 went into effect on January\u00a01, 2020 and applies to agreements settling employment disputes entered into on or after that date.\n                    <\/p>\n<\/div><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Overview As of January\u00a01, 2020, California law limits an employer\u2019s ability to include a \u201cno-rehire\u201d provision in agreements settling employment disputes.\u00a0 Under this new law, absent certain specified [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":10937,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[718,1434,153,8138,8137,7417,399],"class_list":["post-10936","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-lawyers","tag-agreements","tag-california","tag-law","tag-norehire","tag-prohibits","tag-provisions","tag-settlement"],"_links":{"self":[{"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/posts\/10936","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/comments?post=10936"}],"version-history":[{"count":0,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/posts\/10936\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/media\/10937"}],"wp:attachment":[{"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/media?parent=10936"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/categories?post=10936"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/tags?post=10936"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}