Settlement Agreements

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Congress recently passed the 2017 Tax Cuts & Jobs Act which includes Internal Revenue Code §162(q). Specifically, § 162(q) provides:

  • No deduction is allowed for any settlement or payment related to sexual harassment or sexual abuse if the settlement or payment is subject to a nondisclosure agreement.
  • No deduction is permissible for attorneys’ fees related

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When settling employment disputes, employers and employees often seek to go their separate ways and avoid crossing paths in the future.  Settlement agreements often include a “No Re-Hire” clause in which employees agree they will not be eligible for re-hire; however, what happens when a former employee challenges the “no re-hire” clause as an unlawful restraint on trade?  And what happens when the employee seeks to invalidate the entire settlement agreement on the basis that the “no re-hire” clause was a material term of settlement?
Continue Reading “No Re-Hire” Clauses May Be Unlawful Restraints of Trade

A divided Ninth Circuit court ruled this week that California’s protections against contracts restraining employment were not explicitly limited to non-compete agreements.  Rather, the law can apply to any type of employment agreement, including settlement agreements.

In Donald Golden v. California Emergency Physicians Medical Group et al., case number 12-16514, the employer and employee entered into a proposed settlement agreement.  The no-employment provision in the settlement agreement states that the employee will not continue to be employed at any of the employer’s current facilities, or at any other facility with which the employer may contract in the future.  The employee appealed and sought to “un-do” the settlement agreement based on this clause.
Continue Reading California Court Rules On Protections Against Contracts: Why You Should Review Your Form Agreements Today