When employers settle employment claims with employees it is not uncommon for the employer to include a provision in the settlement agreement that prohibits the employee from future employment with the employer, its parent company, subsidiaries, divisions, affiliates or contractors of the employer. Starting January 1, 2020, thanks to AB 749, such provisions will be void as a matter of law and against public policy in California.

There is one exception. If the employer settles with an employee accused of sexual harassment or sexual assault, then an employer may, by written settlement agreement, exclude the employee from future employment.

Combine this protection with the enmity shown to arbitration agreements under the new laws, and the cost to resolve employment claims, the ability to eliminate the possibility of future problems just became more complicated. If an employment-related claim is suspected or arises it is imperative that employers, in the employee favorable environment of California, immediately contact their legal counsel.

The information presented is not intended to be, and does not constitute, “legal advice.” Because each situation varies, and only brief summary information is provided here, you should not use this information as a basis for action unless you have independently verified with your own counsel that it applies to your particular situation.