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The use of “No Rehire” Provisions in settlement agreements between employers and their former employees allow employers to protect themselves against “boomerang” lawsuits.  For instance, a former employee who claims he/she was terminated because of discrimination would be prevented from later submitting a new job application and then suing the employer again claiming he/she was not hired because of discrimination.  This common provision is basically an agreement by the employee that in exchange for consideration, usually the payment of a sum of money, he/she will dismiss their claims against the employer and will contractually agree not to seek to be rehired.  A recent decision from a panel of judges in the Ninth Circuit, however, has called the “No Rehire” provisions into question as possibly violating section 16600 of the Business and Professions Code.James-Kachmar-08_web

In Golden v. California Emergency Physicians Medical Group, the plaintiff doctor sued after he lost emergency room privileges at one of CEPMG’s facilities.  Prior to trial, the plaintiff doctor agreed to settle his claim for the payment of a large sum of money and initially agreed (at least orally through counsel) not to seek employment with CEPMG again.  The “No Rehire” provision that was subsequently incorporated into a written settlement agreement provided that the plaintiff doctor would not seek re-employment with CEPMG and also provided CEPMG the right to terminate the plaintiff’s employment should he be working at any facility that it subsequently acquired.  (CEPMG is a large consortium that manages or staffs many emergency rooms, in-patient clinics and other facilities in California and other Western states and intends to continue expanding.)

After the plaintiff doctor refused to sign the written settlement agreement containing the “No Rehire” provision, his former counsel filed a motion to enforce the settlement agreement (apparently to obtain his contingency fee from the settlement proceeds).  The District Court concluded that the “No Rehire” provision was not a “non-compete” provision and therefore did not run afoul of section 16600.  The Court ordered plaintiff to execute the written settlement agreement containing the “No Rehire” provision.
Continue Reading Are “No Rehire” Provisions in Settlement Agreements at Risk?

In our previous post, Same-Sex Marriage Partners Now Covered by FMLA, we reported on the final FMLA rule that expanded the definition of “spouse” under the FMLA to include employees in legal same-sex marriages. Although this rule took effect on March 27, 2015, a federal district court ruling in Texas left the status of…

Beth-West-15_webThe United State Supreme Court issued its much anticipated decision in the case of Young v. UPS on March 24, 2015.  As of now, Young’s pregnancy discrimination claim remains alive and well.

Below is a summary of the court’s ruling:

Factual and Procedural Background.

Young was a part-time driver for UPS. When she became pregnant, her doctor advised her that she should not lift more than 20 pounds. UPS, however, re­quired drivers like Young to be able to lift up to 70 pounds. UPS told Young that she could not work while under a lifting restriction. Young subsequently filed a lawsuit under the federal Pregnancy Discrimination Act (the “Act”), claiming that UPS act­ed unlawfully in refusing to accommodate her pregnancy-related lift­ing restriction. She brought only a disparate-treatment (intentional) claim of dis­crimination, which a plaintiff can prove either by direct evidence that a workplace policy, practice, or decision relies expressly on a protect­ed characteristic, or by using the burden-shifting framework set forth in the case of McDonnell Douglas Corp. v. Green. Under the McDonnell Douglas framework, the plaintiff has “the initial burden” of “establishing a prima facie case” of discrimination.  If she carries her burden, the employer must have an opportunity “to articulate some legitimate, non-discriminatory reason[s] for” the difference in treatment.  If the employer articulates such reasons, the burden shifts back to the plaintiff who has “an opportunity to prove by a preponderance of the evidence that the reasons . . . were a pretext for discrimination.” (cites omitted)

UPS filed a summary judgment motion in the District Court. In reply, Young presented several favorable facts that she believed she could prove. In particular, she pointed to UPS policies that accommodated work­ers who had lifting restrictions similar to hers because they were either injured on the job or had disabilities covered by the Amer­icans with Disabilities Act   (ADA).  UPS policies also accommodated employees who couldn’t drive at all because they had lost Department of Transportation (DOT) certifications. Young argued that these policies showed that UPS discriminated against its pregnant employees because it had a light-duty-for-injury policy for numerous “other persons,” but not for pregnant workers. UPS responded that, since Young did not fall within the on-the-job injury, ADA, or DOT categories, it had not discriminated against Young on the basis of pregnancy, but had treated her just as it treated all “other relevant persons.”
Continue Reading U.S. Supreme Court Issues Decision in Young v. UPS

LaborEmpSeminarLogoSummary of Program

Unfortunately, both single-plaintiff and class-action wage and hour lawsuits continue to plague California employers. Often employers are sued because of technical violations that occur simply because the employer is unaware of its legal obligations. Come join the Labor and Employment Group at Weintraub Tobin as they discuss the nuts and bolts of…