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Grinberg: AB 749 and 'No Rehire' Provisions

  • State: California
  • -  392 views
  • -  3 shares

Here’s something you may or may not have heard of, but that I’ve been getting several inquiries about: Assembly Bill 749. 

Gregory Grinberg

Gregory Grinberg

Signed by Gov. Gavin Newsom in October, AB 749 will serve to allow California to interfere even further with the right of employers and employees to contract and reach agreements to resolve their disputes.

How? Because it would render agreements to never again seek employment with a particular employer void and unenforceable, for any such agreement entered into on or after Jan. 1, 2020.

AB 749 doesn’t specifically reference workers’ compensation cases, but given that it includes any matter involving an “aggrieved person” who files a claim against the employer “before an administrative agency,” it’s a safe bet that we’ll see this argument in the workers’ comp world.

Well then, why does this matter at all? Who cares about an agreement about rehiring?

A compromise and release typically settles an injured worker’s rights to future medical care, usually for an estimate of the future value of that medical care. If the employment relationship remains, there isn’t much stopping an injured worker from pocketing the “future medical” money and then very quickly filing a new workers’ compensation claim.

Some employers, as part of a C&R, seek a letter of resignation, so that if an applicant suddenly has a new injury to the same body part, it will be pursued against another insurance policy, and not the settling party. That resignation letter typically also includes an agreement not to seek rehire, so that the injured worker cannot wait six months and apply the same tactic once again, forcing the employer to pay for future medical a second time.

Well, AB 749 would put the kibosh on such agreements. While it allows the parties to make an agreement to “end a current employment relationship,” the injured worker would be free to seek rehire with the same employer.

So what does AB 749 mean for the defense community? That means that while we are not dodging raging fires or trying to draft our pleadings with quill and ink and candlelight (all part of California’s charms as we enter 2020), defendants must now be particularly careful in crafting settlement documents.

Do you have a plan in place for moving forward? Are there changes that you need to make to your standard operating procedures? Or am I playing Chicken Little and worried over nothing?

Gregory Grinberg is a workers' compensation defense attorney at the Law Office of Gregory Grinberg, based in the San Francisco Bay Area. This post is reprinted with permission from Grinberg's WCDefenseCA blog.

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