On August 9, 2019, Illinois Governor JB Pritzker signed into law the Illinois Workplace Transparency Act (“WTA”), imposing new requirements and modifying existing laws in ways that will impact nearly all Illinois employers – and may be a signal of things to come in other US states.  The WTA aims to address concerns raised through the #MeToo movement regarding the frequency of sexual harassment occurrences and concealment of claims of such unlawful conduct.  But the WTA also goes beyond concerns regarding sexual harassment and addresses prohibitions against other unlawful employment practices and concealment of such claims, and creates broad restrictions on confidentiality provisions that are commonly included in employment and separation agreements, amending the Illinois Human Rights Act to expand protected categories under the law and require disclosures about legal claims of unlawful employment practices, and limiting the use of arbitration agreements.  Here is how the WTA breaks down:

Confidentiality Provisions In Employment-Related Contracts:

With regard to contracts for employment entered on or after January 1, 2020, the law states that they may not:

  • prevent an employee, prospective employee, or former employee from making truthful statements or disclosures regarding unlawful employment practices;
  • “have the effect of” discouraging the employee from reporting unlawful employment practices; or
  • unilaterally require an employee to waive, arbitrate, or otherwise diminish any existing or future claim regarding an unlawful employment practice.

However, employment agreements may include these otherwise prohibited provisions, so long as the agreement contains mutual confidentiality requirements (and therefore apply also to the employer), the agreement is in writing and reflects actual knowing, bargained for consideration from both parties, and states that employees retain the right to:

  • report unlawful employment practices or criminal conduct to appropriate federal, state, or local agency;
  • participate in a proceeding by a federal, state, or local employment agency enforcing employment discrimination laws;
  • make truthful statements or disclosures when required by law; and
  • request or receive confidential legal advice.

The failure to state these rights in a mutual contract will create a rebuttable presumption that the agreement is void.

Settlement and separation agreements between an employer and current or former employee may include promises of confidentiality related to the alleged unlawful employment practices being resolved through the agreement at issue, but, these agreements also must include certain affirmative statements, familiar to many employers due to the similarity to the federal Older Workers Benefit Protection Act requirements for the waiver and release of claims under the federal Age Discrimination in Employment Act, as follows:

  • confidentiality is the documented preference of the employee/former employee and is mutually beneficial to both employee and employer;
  • the employee is notified in writing of his or her right to have legal counsel review the agreement;
  • there is valid, bargained for consideration in exchange for the confidentiality provisions;
  • the agreement does not waive claims of unlawful employment practices that accrue in the future;
  • the employee has 21 days to consider the written agreement, however, signing the agreement before the 21 days expire waives the employee’s right to review the agreement for longer; and
  • the employee has seven days after signing the agreement to revoke it, unless the employee knowingly and voluntarily waives this seven-day revocation period.

In addition, settlement or severance agreements may not: 1) include a unilateral clause preventing the employee/former employee from making truthful disclosures or statements regarding unlawful employment practices; or 2) require the employee to waive their right to testify when legally compelled to do so in an administrative, legislative, or judicial proceeding regarding unlawful employment practices or criminal conduct.  Failure to comply with all of these provisions in a settlement or severance agreement will render any confidentiality provisions in it void.

However, the WTA also clarifies that it does not prevent employees from waiving the right to seek or obtain remedies relating to unlawful practices claim that occurred before the agreement is signed; or disrupt an employer’s ability to require confidentiality surrounding allegations of unlawful employment practices by:

  • employees whose job duties involve receiving and investigating internal complaints;
  • employees who participates in ongoing investigations;
  • employees or third parties who receive attorney-client privileged communications or attorney work product in connection with a dispute of an unlawful employment practices;
  • individuals subject to legal or evidentiary privileges; and
  • third parties hired by an employer to investigate complaints of unlawful employment practices.

Further, the WTA does not apply in situations when there is a controlling, valid collective bargaining agreement.

Modifications to the Illinois Human Rights Act (“IHRA”)

Expansion of Protected Statuses

The WTA expands the definition of prohibited conduct to prohibit discrimination and harassment in employment on the basis of both actual or perceived race, color, religion, national origin, ancestry, age, sex, marital status, order of protection status, disability, military status, sexual orientation, pregnancy, or unfavorable discharge from military service.  The WTA also clarifies that employers are responsible for harassment by non-management and non-supervisory employees and non-employees only if the employer becomes aware of the alleged harassment and then fails to take reasonable corrective action measures to stop the harassment.  As these two revisions generally comport with existing interpretations of federal anti-discrimination laws, they may not have a significant impact on employer practices in Illinois, but anti-discrimination and harassment policies nonetheless should be updated to reflect the change.

Employer Disclosures

Perhaps the most significant changes to the IHRA are that, as amended, it now requires employers to provide annual disclosures to the Illinois Department of Human Rights (“IDHR”) identifying the total number of any adverse judgements or administrative rulings against the employer that involved unlawful discrimination or harassment, and a specific breakdown of this total by the type of claim involved, including discrimination or harassment based on sex; race, color, or national origin; religion; age; disability; military status or unfavorable discharge; sexual orientation or gender identity; or any other protected category under the IHRA, and finally, whether equitable relief was ordered in any such proceedings.

Further, during an investigation by the IDHR of a charge of unlawful discrimination or harassment, the IDHR may request employers to disclose the number of settlements they have entered into in the previous five years that resolved claims of sexual harassment or unlawful discrimination that occurred in workplace, involved an employee or corporate executive of the employer without regard to whether behavior occurred in the workplace, and an explanation of the type of claims involved in each settlement, using the same categories stated above.

Data provided by employers in these disclosures is confidential and exempt from the Illinois Freedom of Information Act, although it will be used by the IDHR to compile statistical reports about employer claims, in general, with no employer-specific information to be included.

Sexual Harassment Training

Another new requirement under the WTA is, effective January 1, 2020, employers will be required to conduct annual sexual harassment training for all employees, using a model sexual harassment training program to be developed by the IDHR.  Restaurant and bar employers must conduct sexual harassment training on an annual basis that pertains specifically to the risks of such unlawful conduct in their respective industry and meet or exceed a model restaurant and bar sexual harassment prevention training program to be developed by the IDHR.  In addition, any restaurant or bar must maintain a written sexual harassment policy that it provides to all employees within the first calendar week of employment stating:

  • that the employer prohibits sexual harassment;
  • the definition of sexual harassment under the Illinois Human Rights Act and Title VII of the Civil Rights Act of 1964;
  • how an employee can report allegations of sexual harassment;
  • an explanation of the company’s internal complaint process;
  • how to contact and file a charge with the IDHR and the federal Equal Employment Opportunity Commission;
  • that the employer and law prohibit retaliation for reporting sexual harassment claims; and
  • that employees are required to participate in annual sexual harassment training.

These new provisions will likely require employers to take multiple proactive steps, including a look at any standard employment agreements, severance and settlement agreements, as well as updating their policies and training programs to include the new requirements set forth above.