AB 749 by Assemblymember Mark Stone (D-Scotts Valley) was signed into law by Governor Newsom on October 12 as Chapter 808. The new law adds several new code sections as Chapter Three of Title XIV of Part Two of the California Code of Civil Procedure. The new section of the law is entitled Agreements Settling Employment Disputes.
It adds one section to the CCP, Section 1002.5. The bill prohibits any agreement to settle an employment dispute from containing a provision that prohibits, prevents, or otherwise restricts any settling party that is an aggrieved person from working for the employer against which the aggrieved person has filed a claim, or any parent company, subsidiary, division, affiliate or contractor of the employer.
This bill also clarifies that an employer and an aggrieved person are free to agree to end a current employment relationship or to prohibit or otherwise restrict the settling aggrieved person from obtaining future employment with the settling employer if the employer has made a good faith determination that the person engaged in sexual harassment or sexual assault. The bill further clarifies that an employer is not required to continue to employ or rehire a person if there’s a legitimate non-discriminatory or non-retaliatory reason for terminating the employment relationship or for refusing to rehire that person.
The bill provides that a provision in an agreement entered into on or after January 1, 2020, that violates this new rehire clause prohibition is void as a matter of law and against public policy. In addition, the bill defines three terms that are used in this new statute. The first is an aggrieved person. The second is sexual assault. And the third is sexual harassment.