August 23, 2019
Employment Law Alert
Employment Law Alert
Author(s): Brian V. Alcala
Earlier this month, Illinois passed yet another broad-reaching piece of employment legislation that will impact the way in which Illinois employers do business. This new legislation, enacted with the purpose of “securing individuals’ freedom from unlawful discrimination and harassment in the workplace,” amends several existing laws, including the Illinois Human Rights Act, the Victims’ Economic Security and Safety Act, and the Uniform Arbitration Act. It also creates three new laws, including the Workplace Transparency Act, the Sexual Harassment Victim Representation Act, and the Hotel and Casino Employee Safety Act.
Most of these new requirements go into effect on January 1, 2020, with the main exception being certain provisions applicable to the service industry (i.e., hotels, restaurants/bars, casinos, etc.), which go into effect immediately. A review of some of these important new requirements is as follows:
The Workplace Transparency Act (“WTA”) creates several new prohibitions and obligations pertaining to employment-related agreements entered into, modified, or extended on or after January 1, 2020, including relating to non-disclosure provisions, non-disparagement provisions, arbitration agreements, and settlement and termination agreements.
Non-disclosure and non-disparagement clauses
Under the WTA, no agreement may contain a non-disclosure provision that prohibits, prevents, or otherwise restricts any current, former, or prospective employee from reporting allegations of discrimination, harassment, or retaliation to any federal, state, or local agency.
Further, no agreement may include a non-disparagement provision that prohibits an employee or prospective employee from making truthful statements or disclosures about alleged unlawful employment practices.
Any agreement or waiver that is a mutual condition of employment or continued employment may include these provisions, but only if it demonstrates “actual, knowing, and bargained-for consideration” from both parties, and acknowledges the right of the employee/prospective employee to: (1) report any good faith allegations of discrimination, harassment, or retaliation to the relevant governmental agencies; (2) report any good faith allegations of criminal conduct to the relevant authorities; (3) participate in a proceeding with the relevant agency charged with enforcing discrimination laws; (4) make any truthful statements or disclosures required by the law; and (5) request or receive confidential legal advice.
Settlement and termination agreements
An employer may enter into settlement agreements with any employee, prospective employee, or former employee that include a confidentiality provision covering discrimination, harassment, or retaliation claims, but only under very limited circumstances. Specifically, the following requirements must be met:
An employer is prohibited from unilaterally including any clause that prohibits the employee, prospective employee, or former employee from making truthful statements or disclosures regarding discrimination, harassment, or retaliation.
Pursuant to the WTA, agreements to arbitrate are presumptively invalid, expressly providing that any agreement that is a unilateral condition of employment or continued employment cannot require an employee (or prospective employee) to waive or arbitrate any discrimination, harassment, or retaliation claims.
We anticipate legal challenges to this provision and time will tell if it withstands legal scrutiny.
This new legislation also includes multiple amendments to the Illinois Human Rights Act (“IHRA”).
First, the IHRA is amended to clarify that discrimination and harassment may be based on an individuals’ actual or “perceived” membership in a protected class.
Second, the IHRA expands the definition of “working environment” such that it is no longer “limited to a physical location an employee is assigned to perform his or her duties.”
Third, it clarifies that employers are only liable for discrimination or harassment by nonmanagerial and nonsupervisory employees if the employer becomes aware of the conduct and fails to take “reasonable corrective measures.”
Fourth, it expands the IHRA protections to independent contractors and consultants.
Fifth, it creates new disclosure requirements. Beginning on July 1, 2020, and continuing on each July 1 thereafter, each employer that has had an adverse judgment or administrative ruling against it during that preceding calendar year must disclose the same to the Illinois Department of Human Rights. Specifically, the employer must disclose:
These new disclosures are exempt from discovery pursuant to the Freedom of Information Act, but the IDHR will publish a general report each year aggregating the information from employers.
Sixth, it provides the IDHR with additional discovery tools when investigating state discrimination, harassment, and retaliation claims, including permitting the IDHR to discover information pertaining to settlements of discrimination, harassment, and retaliation over the last five years.
The new legislation also amends the IHRA to add in specific requirements for employee training. Specifically, all Illinois employers, regardless of size, will be required to provide anti-harassment training to its employees. A model training program will be available from the IDHR.
In order to get fully up to speed, Illinois employers need to take a hard look at their employment-related agreements and policies.
The foregoing has been prepared for the general information of clients and friends of the firm. It is not meant to provide legal advice with respect to any specific matter and should not be acted upon without professional counsel. If you have any questions or require any further information regarding these or other related matters, please contact your regular Nixon Peabody LLP representative. This material may be considered advertising under certain rules of professional conduct.