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AB-749 Settlement agreements: restraints in trade.(2019-2020)



SECTION 1.

 Chapter 3.6 (commencing with Section 1002.5) is added to Title 14 of Part 2 of the Code of Civil Procedure, to read:

CHAPTER  3.6. Agreements Settling Employment Disputes
1002.5.
 (a) An agreement to settle an employment dispute shall not contain a provision prohibiting, preventing, or otherwise restricting a settling party that is an aggrieved person from obtaining future employment with the employer against which the aggrieved person has filed a claim, or any parent company, subsidiary, division, affiliate, or contractor of the employer. A provision in an agreement entered into on or after January 1, 2020, that violates this section is void as a matter of law and against public policy.
(b) Nothing in subdivision (a) does any of the following:
(1) Preclude the employer and aggrieved person from making an agreement to do either of the following:
(A) End a current employment relationship.
(B) 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.
(2) Require an employer to continue to employ or rehire a person if there is a legitimate non-discriminatory or non-retaliatory reason for terminating the employment relationship or refusing to rehire the person.
(c) For purposes of this section:
(1) “Aggrieved person” means a person who has filed a claim against the person’s employer in court, before an administrative agency, in an alternative dispute resolution forum, or through the employer’s internal complaint process.
(2) “Sexual assault” means conduct that would constitute a crime under Section 243.3, 261, 262, 264.1, 286, 287, or 289 of the Penal Code, assault with the intent to commit any of those crimes, or an attempt to commit any of those crimes.
(3) “Sexual harassment” has the same meaning as in subdivision (j) of Section 12940 of the Government Code.