California 2020 Legislative Update – Settlement Agreements and Leaves of Absence

Today our employer focused legislative update zeroes in on “no rehire” provisions in settlement agreements, expansion of benefits to employees who donate organs, and care for a family member:

Assembly Bill 749: Prohibits Settlement Agreements with a Rehire Restriction

Settlement agreements often contain a provision prohibiting or restricting an employee from seeking reemployment with the employer.  AB 749 creates new legislation (Code of Civil Procedure § 1002.5), which prohibits agreements that settle an employment dispute from including:

“… a provision prohibiting, preventing, or otherwise restricting a settling party … from obtaining future employment with the employer …  or any parent company, subsidiary, division, affiliate, or contractor of the employer.”

Per the author, the purpose of the bill is to protect employees who give up their jobs due to harassment or discrimination, even though they did not do anything wrong. 

The prohibition on “no hire” is not absolute:

• If the employer makes a good faith determination that the settling employee engaged in sexual harassment or sexual assault, the agreement may restrict the employee’s ability to be re-hired.
• An employer is not required to continue to employ or rehire a person if there is a legitimate non-discriminatory or non-retaliatory reason for terminating or refusing to rehire the person.

Assembly Bill 1223: Additional Unpaid Leave for Organ Donation

Existing law requires employers with 15 or more employees to provide up to 30 business days of paid leave to employees who take leave for organ donation.  AB 1223 extends this benefit and requires covered employers to provide an additional unpaid leave of up to 30 business days.  Per the California Medical Association, which supports the bill, AB 1223 could help increase the organs available for transplant by eliminating barriers that may prevent someone from becoming a living donor.

Senate Bill 83:  Extends the Duration of Paid Family Leave Benefits from Six to Eight Weeks

California paid family leave program (PFL) currently provides up to six weeks of partial pay to employees who take time off to care for a family member or bond with a child.SB 83, signed in June by Governor Newsom, extends this benefit to eight weeks of PFL, as of July 1, 2020.  

Employers should note that PFL does not provide job protections; it is a state program offering partial pay benefits. However, employees may be protected under various California laws that provide up to 12 weeks of bonding leave or family care leave.

Nicholas Kanter and Tal Burnovski Yeyni are attorneys in our Employment Practice Group.