New Law Restricting “No-Rehire Provisions” In Oregon Workers’ Compensation Settlement’s Takes Effect
On July 27, 2023 Oregon Governor Tina Kotek signed HB 3471 into law. The bill places restrictions on when a “no-rehire” provision can be included in a workers’ compensation settlement:
HB 3471 restricts “no-rehire provision”
HB 3471 prohibits employers from requiring a “no-rehire provision” as a part of workers’ compensation settlements unless:
- The claimant first requests the no-rehire provision; or
- The employer conveys in an offer to settle or pre-offer negotiations that settlement is not conditional on the no-rehire provision.
Violation of HB 3471 can result in a civil penalty up to $5,000.
A “no-rehire” provision is broadly defined as “any provision in an agreement barring a worker from seeking further employment, reemployment or reinstatement with an employer.”
What does this mean for you?
Employers can no longer require an employment release that includes a no-rehire provision as a part of a workers’ compensation settlement. Employers can no longer convey that settlement is contingent upon securing a no-rehire provision unless claimant requests it first in writing. If you inquire about settlement, you can ask whether claimant is interested in an employment release with a no-rehire provision but clarify that settlement is not contingent on the no-rehire provision.
If you are interested in settling a workers’ compensation claim, it is easiest to ask claimant or their attorney to make an opening offer. Ask them to clarify if the offer includes a no-rehire provision. Once you receive that confirmation then you are free to negotiate and include that provision.
However, if you solicit a settlement offer and claimant or their attorney says they are not prepared to include a no-rehire provision, you should be prepared to negotiate to settle just the workers’ compensation issue. If you expressed interest in settlement but decline to negotiate once claimant worker says they will not do a no-rehire provision, they may decide to seek civil penalties arguing that you effectively made settlement negotiations contingent on the no-rehire provision. One option is that if claimant or their attorney states they will not include a no-rehire provision then respond with a settlement offer that values the claim based on a regular work release with no permanent disability (i.e. very low value).
If you decide to make an opening offer for settlement you should clarify that it is not contingent on a no-rehire provision. If you prefer, but do not require an employment release with a no-rehire provision, you may make opening inquiries about settlement or respond with an offer that includes an employment release with a no-rehire provision if you clarify the offer is not conditional on the no-rehire provision. If the employee affirmatively reports they are not interested in the employment release with no-rehire provision, you should negotiate in good faith for a CDA/DCS only.
What does this mean for settlements in general?
It is hard to predict what this means for settlements in general. We are concerned the law will reduce settlements. The real concern is about cases where the worker’s attorney negotiates a settlement premised on the worker’s inability to return to work (i.e. significant timeloss, PPD, work disability & vocational services) but are not prepared to move forward with a no-rehire provision. If you proceed with settlement the worker could move forward with settlement and once that is completed obtain a regular work release and ask to be reinstated to work.
What about settlements negotiated prior to the bill that have not been finalized?
Attorneys at SBH are in communication with claimant’s attorneys to confirm that the employment release and no-rehire portion of the settlement remains in place. Collectively, we are ensuring any employment release with a no-rehire provision agreed to prior to this bill, complies with HB 3471 to avoid surprises.
This is a new bill. There are a lot of questions surrounding the language of the bill and how to properly negotiate with these new requirements. SBH attorneys are engaging with each other and other stakeholders in the community to ensure we remain in compliance and that our clients’ interests are protected. As we navigate these new circumstances, we will provide updates and findings.
Have a question about HB 3471or settlements in general? Feel free to contact me at or 503-5956110.
Posted by David White.
