What a Settlement No Longer Buys

For a long time the playbook was simple, and most practice owners learned it by watching someone else use it. A complaint surfaces. The matter is uncomfortable. A check is written, a release is signed, a confidentiality clause buries the facts, a no-rehire clause closes the door, and the practice moves on as though nothing happened. The instrument did three things at once: it ended the claim, it bought silence, and it kept the next applicant — and the malpractice carrier, and the referring physicians down the street — from ever hearing the story.

That instrument no longer exists in California. Not because any one dramatic case killed it, but because the Legislature took it apart one clause at a time, and most of the dismantling happened while practices kept using the old forms.

The Silence Is the Part You Can’t Buy

Start with the confidentiality clause, because that is the clause owners care about most and understand least.

Two statutes govern it, and which one applies depends on how far the matter has traveled.

If an employee has actually filed — a civil suit, or a complaint with the Civil Rights Department — then Code of Civil Procedure § 1001 controls the settlement. It is the old STAND Act (SB 820, 2018) as widened by the Silenced No More Act (SB 331, 2022). The original 2018 version reached only sex: sexual assault, sexual harassment, sex discrimination. SB 331 erased that limit. As of January 1, 2022, a settlement of any FEHA harassment, discrimination, or retaliation claim — race, age, disability, religion, national origin, the full list — may not contain a provision that prevents the disclosure of factual information about the claim. The facts are no longer for sale.

If the matter has not been filed — a separation agreement, a severance offer, a release extracted as a condition of continued employment — then Government Code § 12964.5 controls, and it is, if anything, sharper. There it is an unlawful employment practice to require, as the price of a raise, a bonus, employment, or severance, any term that denies the employee the right to disclose unlawful workplace conduct. A non-disparagement or confidentiality clause in a separation agreement is not merely unenforceable unless it carries a specific statutory carve-out — the now-mandatory line that nothing in the agreement prevents the employee from discussing or disclosing information about unlawful acts in the workplace, such as harassment or discrimination or any other conduct the employee has reason to believe is unlawful. Leave the line out and the clause is void. Worse than void: offering it is itself the violation.

That is the trap, stated plainly. The old form was meant to close a matter. Under § 12964.5 the old form opens a new one. A practice that hands a departing medical assistant a separation agreement with a 2019-vintage gag clause has not bought silence about the underlying complaint; it has committed a fresh unlawful employment practice on top of the original one, and handed the assistant a second claim cleaner and easier to prove than the first.

What You Can Still Keep Quiet — and Why It Matters Less Than Owners Hope

The law did not abolish confidentiality wholesale, and an honest account has to say so. Two things survive.

The settlement amount may still be kept confidential. Both § 1001 and § 12964.5 preserve that. The number stays private.

The claimant’s identity may also be shielded — but only at the claimant’s request, and not where a government agency or public official is a party. This is a protection for the employee, repurposed by employers who assume it runs the other way. It does not. The practice cannot impose anonymity to protect itself; it can only honor the employee’s choice to remain anonymous.

Notice what is left out of both exceptions. You may hide the price and, at the employee’s option, the name. You may not hide the conduct. For a practice whose real fear is reputational — the story reaching the next hire, the medical board, the plaintiff’s bar that reads enforcement databases for a living — the facts are exactly the thing the law now refuses to let you keep.

The Door You Can’t Close (the Actual AB 749)

The no-rehire clause is its own statute, and it is the one people mean when they say “AB 749.” Code of Civil Procedure § 1002.5 makes a provision barring a settling employee from future employment with the practice — or its affiliates — void as a matter of law. There is a narrow exception: a practice may keep a no-rehire term where it has made a good-faith, documented determination that the person engaged in sexual harassment or sexual assault (the documentation requirement was added by AB 2143 in 2020, which also asks that the underlying claim have been filed in good faith).

Read that exception the way a hostile reader will. It rewards the practice that investigated and documented, and it does nothing for the practice that paid to make a problem disappear without ever determining what the problem was. The structure of the statute quietly punishes the quiet exit. The clause you most want is available only to the practice that did the work part one described — and that practice rarely needs the clause.

Why “Without Counsel” Is the Operative Phrase

Part one’s teaser said the agreements people sign without counsel are not enforceable in the way they think. The phrase cuts in both directions, and both matter.

The employee signing without counsel is exactly who SB 331 was written around. The statute now requires that a separation agreement waiving FEHA claims come with written notice of the right to consult an attorney and at least five business days to do it. An employee who signs anyway, fast, unrepresented, retains the right to speak about the underlying facts regardless of what the paper says — because the law, not the employee’s signature, is what voids the gag. The practice that treats a quick unrepresented signature as a closed file has misread what the signature can accomplish.

The practice drafting without counsel is the more dangerous half. The forms in circulation — pulled from a 2018 template, a colleague’s old severance letter, a generic national packet — were lawful when written and are now affirmatively hazardous. There is also a federal layer most practice owners never see. Under the National Labor Relations Act, the Board’s McLaren Macomb decision (2023) held that merely offering a severance agreement with broad confidentiality or non-disparagement terms can violate the Act, and it reaches non-supervisory staff — front-desk, MAs, techs — regardless of union presence, with the Board looking at job function rather than title. The federal picture is genuinely unsettled: the General Counsel guidance that drove aggressive enforcement was rescinded in 2025, the Board’s composition shifted with confirmations at the end of that year, and how much of McLaren Macomb survives is an open question. But “unsettled” is not “safe.” In Valley Radiology, P.A. (March 2026), an administrative law judge applied the same framework to a radiology practice’s severance agreement with a physician and found the non-disparagement and confidentiality terms unlawful. A medical practice was the defendant. The clauses were the ordinary ones.

Back to the Practice

The throughline from part one holds. The work that reduces FEHA exposure was never in the settlement; it was in the conditions that make a settlement unnecessary, or, when one is necessary, narrow. The complaint procedure that names someone other than the harasser. The investigation that actually determines what happened — which, not incidentally, is the only thing that earns the documented no-rehire exception. The response on the record.

The settlement is where a practice’s earlier failures get priced, and California has decided the practice may no longer use that moment to also purchase silence about them. What you can still buy is small: a private number, a name withheld at the employee’s request. What you cannot buy is the story. A practice that understands this stops treating the release as a vault and starts treating it for what it now is — a receipt for conduct that the rest of the world is free to learn about.

None of that is on the form. All of it is on the practice.

A note on what this is not: general commentary, not legal advice, and not a substitute for counsel on a specific agreement. The statutes here interact in ways that turn on the precise posture of a matter, and the federal overlay is moving. The point of the piece is the opposite of a form to copy.

Legal Medicine publishes on the law that governs medical practice in California. If this is the kind of argument you want in your inbox, subscribe via Substack and read with us.

Sources

Cal. Code Civ. Proc. §§ 1001, 1002.5 · Cal. Gov. Code § 12964.5 · STAND Act (SB 820, 2018) · Silenced No More Act (SB 331, 2022) · AB 749 (2019); AB 2143 (2020) · National Labor Relations Act; McLaren Macomb, 372 NLRB No. 58 (2023) · Valley Radiology, P.A. (NLRB ALJ, March 2026).