What You Need to Know About the No-Rehire Policy in California
California’s amended no-rehire policy prohibits employers from including any conditions in employment disputes that prevent or restrict the settling employee from working with the employer in the future. Here is everything you need to know about the no-rehire policy in California.
In 2019, Governor Newsom signed Assembly Bill 749 (AB 749) into law, which added the original no-rehire policy to Section 1002.5 to California’s Code of Civil Procedure. In January 2020, California law limited an employer’s ability to add a no-rehire provision when settling employment disputes.
Implications of the Amended No-Rehire Law
This law allows employers and employees to enter binding agreements when settling employment disputes. It also allows former employees the option to reapply for employment with their former employer any time after their case has settled. For example, under the amended law, if the settling employee decides to resign as part of the agreement, they could reapply for their previous position soon after. This puts employers in a unique position. If they choose to bring the former employee back on, they could potentially risk further claims being filed against them.
While the no-rehire policy in California prohibits an employer from taking measures to prevent the settling employee from working with them in the future, there is no written rule that requires the employer to hire that employee again for any reason. The law only limits an employer’s ability to include a no-rehire provision when settling employment disputes.
Exceptions to the Law
There is a possible exception if the employer has determined in good faith (a good-faith exception) that the employee had engaged in sexual assault or sexual harassment. In this case, a no-rehire provision is acceptable in California. This exception also applies if the employee had engaged in criminal conduct. In order for a good-faith exception to be made, the employer must have documented the incident of sexual assault, harassment, or criminal conduct before the employee filed their claim against the employer.
Related: Examples of Sexual Harassment in the Workplace
In this context, the employee is considered the “aggrieved party,” which applies to any party whose personal property, financial interests, or rights had been affected negatively by another party’s actions. The employee must have filed the claim against their employer in good faith in order to be considered the aggrieved party, entitled to the rights and protections of the no-rehire provisions when settling.
However, “good faith” can be difficult to interpret, and the term is not defined by the law. This can complicate settlements. For example, if an employer decides to litigate whether their employee brought forward a claim in good faith, and the court decides they have not, the employer could be facing retaliation charges. In the workplace, retaliation occurs when an employer treats an employee or former employee less favorably for reporting a legal violation in the workplace (such as workplace discrimination).
Related: How to Prove Retaliation in the Workplace
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If you or a loved one would like to know more about the no-rehire policy in California, contact us. Get your free consultation with one of our California Employment Attorneys today!