California’s Prohibition Against No-Rehire Provisions

Erin Owen authored the article "California's Prohibition Against No-Rehire Provisions," for Bloomberg Law on November 15, 2020.

Excerpt: Historically, settlement agreements between California employers and their former employees often contained no-rehire provisions that prohibited a settling employee from applying for re-employment, and/or provided for immediate termination after an inadvertent or surreptitious re-employment. These no-rehire terms helped protect employers against the risk that former employees settling re-employment, after settling legal claims, would file a subsequent lawsuit on discrimination or retaliation grounds when they weren't rehired.

No-rehire clauses protect legitimate employer interests in mitigating future litigation risks when paying settlement sums to employees who have filed claims against the employers. Nevertheless, the California legislature enacted a new law prohibiting these provisions.

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