Beginning January 1, 2020, AB 749 (Stone), Chapter 808, adds Chapter 3.6 (commencing with Section 1002.5) to Title 14 of Part 2 of the Code of Civil Procedure (CCP), and names it “Agreements Settling Employment Disputes.” The new law adds just one section to the CCP.

This new law prohibits an agreement to settle an employment dispute from containing a provision that prohibits, prevents, or otherwise restricts a 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.

The law 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 new law further clarifies that an employer is not required to continue to employ or rehire a person if there is a legitimate, nondiscriminatory or nonretaliatory reason for terminating the employment relationship or refusing to rehire the person. Moreover, the law provides that a provision in an agreement entered into on or after January 1, 2020 that violates this no-rehire clause prohibition is void as a matter of law and against public policy.

Finally, the new law defines three terms that are used in the new statute: “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.

“Sexual assault” means conduct that would constitute a crime under specified sections of the Penal Code, assault with the intent to commit any of those crimes, or an attempt to commit any of those crimes. “Sexual harassment” has the same meaning as used in the Fair Employment and Housing Act.

Chris Micheli is an attorney and legislative advocate with the Sacrament governmental relations firm of Aprea & Micheli, Inc. He can be reached at (916) 448-2075 or