The Illinois Workplace Transparency Act: New Transparency in Illinois

The Illinois Workplace Transparency Act: New Transparency in Illinois

The Illinois legislature has passed several new employment laws this last year. We previously wrote about the amendment to the Illinois Equal Pay Act, which includes new limits about disclosing and seeking an employee’s salary history, and we discussed the new expense reimbursement law.

The Illinois General Assembly also passed the Workplace Transparency Act (the “Act”), which protects employees and creates new obligations for employers, including mandatory sexual harassment training and limits to certain agreements and policies. The Act additionally amends the Illinois Human Rights Act to broaden its application. So how might the Act impact your business?

Mandatory sexual harassment training

Under the Act, every Illinois employer will have to provide annual sexual harassment prevention training. Employers can use the model training program that the Illinois Department of Human Rights developed, or employers can use alternative training that is equal to or exceeds the Department’s standards—such as ourworkplace and management training— which ensures your business’s compliance with the new law while also helping your business grow.

New obligations for employment agreements and company policies

The Act also impacts employment contracts and other employment policies. Specifically, the new amendments require companies to review and audit their employment policies, agreements, and employee handbooks to ensure compliance with the Act’s many provisions.

For example, the Act has introduced new obligations for confidentiality and arbitration clauses in the employment context. It has been common practice for some employers to have employees sign non-negotiable contracts upon starting employment. These contracts often included promises of confidentiality and a binding obligation to pursue any legal disputes in arbitration as opposed to a court of law. Under the new Act, employers cannot use these contracts to prevent an employee from disclosing to the government or testifying under oath about criminal conduct or unlawful employment practices, such as discrimination or harassment.

If such contracts are able to be negotiated and the employee receives “actual, knowing, and bargained-for consideration,” then companies may include confidentiality language related to discrimination or harassment. However, it must include certain disclaimers. For example, they must indicate that the employee can make good-faith reports of discrimination, harassment, or criminal conduct to an appropriate government agency or official, participate in an appropriate proceeding, make truthful statements as legally required, and ask for and receive confidential legal advice.

Similarly, severance agreements with confidentiality language must now include additional disclaimers to employees. For instance, the confidentiality language must be mutual, the employee must be advised in writing to consult with an attorney, and the employee must receive some benefit for the confidentiality language. Additionally, the employee must also be provided 21 days to review the agreement, and allowed 7 days to revoke it. Lastly, the employee cannot be asked to waive claims of discrimination or harassment that occur after signing the agreement.

Arbitration agreements

The new amendments further include new requirements for arbitration agreements. While different versions of the new law have proposed different requirements (likely out of a concern that some of the requirements might conflict with federal law), the final version includes this language:

Any agreement, clause, covenant, or waiver that is a unilateral condition of employment or continued employment and requires the employee or prospective employee to waive, arbitrate, or otherwise diminish any existing or future claim, right, or benefit related to an unlawful employment practice to which the employee or prospective employee would otherwise be entitled under any provision of State or federal law, is against public policy, void to the extent it denies an employee or prospective employee a substantive or procedural right or remedy related to alleged unlawful employment practices, and severable from an otherwise valid and enforceable contract under this Act.

Even so phrased, this language might still conflict with existing federal law. In part for that reason, it is unclear how courts will interpret and enforce the new arbitration amendments. Until there is legal certainty, employers that seek to arbitrate claims will want to consider providing employees additional consideration or benefits in their arbitration agreements beyond simply their employment. Employers should also include the same disclaimers in their arbitration agreements as are contained in their confidentiality and severance agreements.

Exceptions

In the Act, there are limited exceptions related to confidentiality language. The confidentiality restrictions do not apply to collective bargaining agreements, for instance, and an employer can also require certain employees to maintain information as confidential based on the employees’ job duties (for example, employees who participate in confidential investigations).

These recent changes to Illinois law can at times be confusing and complex. Please contact us at The Prinz Law Firm if you have any questions about these new legal requirements, including the new mandatory sexual harassment training, or if you need a review of your employment policies.

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