CCP 1002.5: California’s No-Rehire Ban and Exceptions

California Code of Civil Procedure Section 1002.5 makes no-rehire clauses in employment settlement agreements void. If you filed a workplace claim in good faith and then signed a settlement on or after January 1, 2020, your employer cannot use that agreement to bar you from working for them, their parent company, subsidiaries, affiliates, divisions, or contractors in the future.¹ Three narrow exceptions still let an employer refuse to bring you back.

What the No-Rehire Ban Actually Blocks

Before 2020, it was common for a California employer to pay money to resolve a harassment, discrimination, or wage claim on the condition that the worker promise never to apply there again. Section 1002.5 ended that trade. A settlement of an employment dispute can no longer contain a provision prohibiting, preventing, or otherwise restricting the aggrieved person from obtaining future employment with the settling employer.

The reach is deliberately wide. The restriction also cannot block you from working for a parent company, subsidiary, division, affiliate, or contractor of that employer.¹ For workers in industries dominated by large corporate families, that breadth is the point: a settlement with one brand cannot shut you out of the whole organization.

Who Counts as an Aggrieved Person

The protection runs to anyone who, in good faith, filed a claim against their employer. The statute recognizes four filing routes:

A lawsuit in state or federal court.
A complaint with an administrative agency, such as the California Civil Rights Department.
A claim pursued in arbitration or mediation.
A formal internal complaint through the employer’s own human resources or grievance process.

You do not have to have sued or gone to a government agency. An internal HR complaint followed by a settlement is enough to trigger the no-rehire ban on that agreement.¹ The good-faith requirement means the claim must be genuine rather than a filing made solely to lock in the statute’s protection.

The Three Exceptions

Section 1002.5(b) lets an employer still restrict future employment in three situations.

Ending the Current Job

The settlement can require the end of your current employment relationship. Nothing in the statute forces an employer to keep you on staff through or after a settlement. The law separates ending what exists today from blocking what might happen tomorrow.¹

A Documented Pre-Claim Finding of Misconduct

A no-rehire clause is allowed when the employer made and documented a good-faith determination, before the employee filed the claim, that the employee engaged in sexual harassment, sexual assault, or any criminal conduct. Timing is the whole exception. If the employer investigates after the claim is filed and only then concludes the worker did something wrong, that will not support a no-rehire provision. The determination has to predate the filing.¹

A Legitimate Non-Discriminatory, Non-Retaliatory Reason

The statute does not require an employer to keep employing or to rehire a person if there is a legitimate non-discriminatory or non-retaliatory reason for the termination or refusal to rehire.¹ A position that was eliminated, a lack of qualifications for an open role, or documented performance problems unrelated to the dispute can all justify a decision not to rehire. The statute prevents an employer from using the settlement itself as a blacklisting tool. It does not guarantee you a job back.

When the Statute Applies

Section 1002.5 took effect January 1, 2020, enacted through AB 749.² AB 2143, effective January 1, 2021, refined the exceptions and added the pre-claim good-faith determination language covering sexual harassment, sexual assault, and criminal conduct.¹

What controls is the date of the settlement agreement, not the date of the underlying workplace incident. If the conduct occurred in 2017 but the settlement was signed in 2021, the no-rehire ban applies.

What Happens to a No-Rehire Clause That Violates the Statute

A no-rehire provision that violates Section 1002.5 is void as a matter of law and against public policy.¹ Void means the clause has no legal force from the moment it was written. An employer trying to enforce it later would find a court treating it as if it had never been in the agreement.

The rest of the settlement typically stands. Payment terms, releases of liability, and other provisions remain enforceable. California courts strike the illegal term and leave the rest of the deal intact.

What Section 1002.5 Does Not Cover

Two neighboring California statutes are often confused with the no-rehire ban. Keep them separate.

CCP Section 1002 addresses confidentiality rather than rehiring. It prohibits settlement provisions that prevent disclosure of factual information in civil cases involving sexual assault, childhood sexual assault, sexual exploitation of a minor, or sexual assault against an elder or dependent adult, while still allowing confidentiality for medical information, personal identifying information, and the relationship between the victim and the defendant.³

Government Code Section 12964.5 governs non-disparagement language in employment and separation agreements. A non-disparagement clause must include language stating that nothing in the agreement prevents the employee from discussing or disclosing information about unlawful acts in the workplace, such as harassment or discrimination; a clause missing that disclosure is unenforceable.⁴ Neither statute controls whether you can be rehired. That question belongs to Section 1002.5 alone.

1
California Legislative Information. California Code of Civil Procedure Section 1002.5
2
California Legislative Information. AB 749 Bill Text
3
California Legislative Information. California Code of Civil Procedure CCP 1002
4
California Civil Rights Department. Employment, Separation, and Settlement Agreements Limitations FAQ