Hunton Employment & Labor Perspectives

On August 29, 2023, the California Court of Appeal issued a new opinion that, once again, changes how parties litigate and settle claims brought under California’s Private Attorneys’ General Act (“PAGA”).  See Robert Lacour v. Marshalls of California, LLC, et al., 94 Cal.App.5th 1172, 313 Cal.Rptr.3d 77.

When negotiating a settlement agreement in an employment dispute, “no rehire” language is often a standard term.  This language typically bars the litigating employee from seeking re-employment with the former employer.  However, in California, at least one “no rehire” provision was invalidated because it was not narrowly tailored to the employer at issue.

In Golden v. California Emergency Physicians Medical Group (“CEP”), CEP terminated Dr. Golden’s employment, and he subsequently filed a lawsuit alleging racial discrimination.  The parties settled Dr. Golden’s claims, and CEP included a “no rehire” provision in the settlement agreement.  The provision states:

On July 24, 2012, the Fifth Circuit Court of Appeals issued what may turn out to be one of the more significant Fair Labor Standards Act rulings in recent years.  In Martin v. Spring Break ’83 Productions, LLC, the Fifth Circuit held that, under certain circumstances, a settlement agreement between an employer and its employees involving FLSA claims is enforceable notwithstanding the fact that neither the Department of Labor nor a court approved the agreement.  This ruling is the first appellate-level decision enforcing a private FLSA settlement and potentially opens the door for other circuits and district courts to follow suit.