No Rehire? No Way!

Just ahead of the bill-signing deadline in October, Governor Newsom signed several worker-friendly bills including AB 51, AB 9, SB 142, and AB 749.

When an employment situation sours and an employee pursues his rights, usually at some point there is talk of settlement.  Almost routinely, employers include a no-rehire provision in any settlement agreement which prohibits the former employee from seeking reemployment with the employer. While this may not seem like a big deal if you work for a small company and have no intention of seeking reemployment with the same people who wronged you in the first place, for individuals who work for large employers, the no-hire provision can create significant hardship. For example, if you work for a major retailer with numerous locations and you are terminated, a no-rehire provision might prevent you from working for that company ever again, in any capacity. That means, even if you wanted to work for a store 100 miles away, you would be barred from doing so. This is particularly problematic for long-term employees who have deep knowledge of the employer’s policies and practices and have been successful in their positions for years- they know the job, and have done it well, and now they are unable to apply for any future job at the company where their skills are a perfect match. This is also a significant problem for people who work for a utility; it may be that there is really only one employer in the area you can work for and a ban on working for that company will prevent you from working, period. The no-rehire provision would require you to either move to a new location or develop skills for an entirely different field. It seems, to many employees, like a final act of retaliation by their former employer.

Starting January 1, 2020, employment dispute settlement agreements cannot contain a no-rehire provision and such provisions are void as a matter of law and public policy. There is an exception, undoubtedly inspired by the #MeToo and #TimesUp movements- if an employer has made a good faith determination that the terminated employee engaged in sexual harassment or sexual assault, the employer may prohibit or restrict the terminated employee from obtaining future employment with the employer.

The new prohibition on no-rehire provisions eliminates a punitive and sometimes career-ending tool that employers routinely employ and is a victory for workers in California. As employee-advocates we are thrilled with this new law; employees who stand up for their rights no longer have to give up potential future employment just because they did so.

Jean Krasilnikoff