Elimination of No Re-hire Clause

Monday, October 14, 2019

SACRAMENTO – The Governor has signed AB 749 by Assemblymember Mark Stone (D – Monterey Bay) which prohibits the use of “no re-hire” clauses in settlement agreements that broadly restrict future employment opportunities for workers settling a sexual harassment or other employment dispute.

“The no re-hire clause punishes the victims of discrimination or sexual harassment from continuing employment while the offender remains in the job,” said Stone. “This clause is increasingly difficult when the employer is large, which significantly bars the victims ability to practice their profession. Eliminating this provision will have a meaningfully impact for victims.”

This legislation will bring fairness and clarity to settlement provisions arising from an employment dispute. It will protect employees who are victims of alleged discrimination, harassment or other labor violations and will not protect the perpetrators. No rehire clauses do significant damage to the victim. For example, a hospital’s settlement agreement with an emergency room doctor who filed a racial discrimination claim prevented him from seeking employment in any emergency room that the employer owned or contracted with, including any that it might own or contract with in the future. This makes it hard for the victim to find another job in their career and rewards the offender by letting them remain in the job. An employer still has the right to not hire an employee who has engaged in unlawful acts.

I am proud that the Governor signed this important piece of legislation which becomes law January 1, 2020.

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