By Tom M. Cramer, J.D.
One of the most far-reaching laws affecting various types of agreements in the workplace was signed into law on August 9, 2019, by Illinois Governor Pritzker. Known as the Workplace Transparency Act, it applies to all contracts, agreements, clauses, or waivers entered into, modified, or extended on or after January 1, 2020. As the name of the act suggests, it is intended to provide transparency for these agreements and ensure that the parties involved are educated about the terms and deadlines the law puts in place. It applies to nearly every employer in Illinois.
Cramer Law is ready to assist Illinois employers, along with organizations that employ contractors or consultants in the state, to take a look at their employee handbooks, service and employment contracts, arbitration agreements and separation agreements to confirm that they are in compliance with the act.
Most of this act takes effect on January 1, 2020, but beginning July 1, 2020, employers will be required to disclose information about settlements for sexual harassment and other discrimination claims if requested during an investigation into a pending charge of discrimination, for example. Being able to define and identify sexual harassment is also addressed in this act.
In regards to contracts, one of the principal areas the act covers, here are some of the highlights:
Illinois employees, as well as contractors or non-employees, are covered by this law. So, contracts entered into with either group are covered. A non-employee is defined as individuals who are directly performing services for the employer pursuant to a contract, including contractors and consultants.
One of the significant parts of the Workplace Transparency Act affects arbitration clauses. Employers may no longer require arbitration of any claim arising under any law enforced by the Equal Employment Opportunity Commission (“EEOC”) or the Illinois Department of Human Rights (“IDHR”). This includes claims under Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, Americans with Disabilities Act, the Equal Pay Act and the Illinois Human Rights Act. Any unilaterally required arbitration clause pertaining to EEO laws will be deemed void to the extent it denies substantive or procedural rights or remedies. So, employers cannot force individuals to keep allegations of harassment or retaliation confidential any longer.
Along these same lines, employers may no longer unilaterally require employees to accept employment or continued employment based on an agreement that has the sole purpose of preventing people from making truthful statements or disclosures about violations of EEO laws (e.g., a confidentiality clause that prohibits reporting of EEO violations).
Certain conditions are outlined in the law that will allow foragreements that reflect mutual conditions of employment (e.g., that are negotiated between an employer and employee in good faith for consideration in order to obtain or retain employment). However, those conditions must meet specific requirements. They must be:
- In writing
- Demonstrate actual, knowing, and bargained-for consideration from both parties
the right of the employee or prospective employee to:
- Report good-faith allegations of violations of EEO laws
- Report good-faith allegations of criminal conduct
- Participate in proceedings before EEOC and/or state or federal agency enforcing EEO laws
- Make truthful statements required by law
Other parts of this law pertain to employee termination and/or separation agreements that include confidentiality covenants relating to EEO violations. These are only allowed when:
- The employer notifies the employee in writing of his or her right to attorney review of the agreement before its execution
- There is valid and bargained-for consideration for the exchange of confidentiality
- The agreement does not waive claims of EEO violations that accrue after the date the agreement is executed
- Confidentiality is the employee’s preference and is mutually beneficial to both parties
- The employee has 21 days to consider the agreement before execution
- Unless knowingly and voluntarily waived by the employee, the employee has 7 calendar days following the execution of the agreement to revoke it
In addition, employees may be entitled to attorneys’ fees for successful challenges to contracts that violate the Act.
Finally, this Act requires employers to provide sexual harassment prevention training annually to all employees. This training must minimally:
- Define sexual harassment
- Provide examples of what conduct is prohibited
- State that it’s the employer’s responsibility to prevent, investigate and address sexual harassment
- Provide a summary of federal and state laws that address sexual harassment and offer available remedies for them