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The New Requirements of the Workplace Transparency Act

By Daniel W. Myerson

The Workplace Transparency Act (“WTA”) goes into effect January 1, 2020. 820 ILCS 96/1-1, et seq. Through the WTA, Illinois has restricted the ability of employers to contract with employees in several ways relating to allegations of unlawful employment practices or criminal conduct. An unwary employer may find portions of its employment, termination, or settlement agreements are rendered void by the WTA, and be exposed to lawsuits awarding attorney’s fees for a prevailing plaintiff.

The provisions of the WTA regularly refer to “unlawful employment practices.” The WTA defines these to include any unlawful discrimination, harassment, or retaliation under the Human Rights Act, Title VII, or any other law enforced by the IDHR or EEOC. 820 ILCS 96/1-15.

Contracts Cannot Restrict Reports of Unlawful Conduct. First, no contract can restrict any current, prospective, or former employee from reporting allegations of unlawful conduct to federal, state, or local authorities for investigation. 820 ILCS 96/1-20. This includes criminal conduct or unlawful employment practices. Id.

Employment Contracts Cannot Unilaterally Restrict Disclosures or Claims. Any unilateral condition of employment – i.e., a non-negotiable term required by an employer of its employee – is void if it has the purpose or effect of preventing an employee from making true statements or disclosures about unlawful employment practices. 820 ILCS 96/1-25(a). Because of the broad nature of the phrase “purpose or effect,” an employer will want to carefully evaluate its conditions of employment (including non-disparagement provisions) for potential problems. The statutory language is also thus far unsettled as to whether this applies to non-contractual Employee Handbooks, but could be so interpreted.

Similarly, any unilateral condition of employment that waives, arbitrates, or diminishes a claim, right, or benefit related to an unlawful employment practice is void to the extent it denies them a substantive or procedural right or remedy. 820 ILCS 96/1-25(b). This implicates, for instance, any agreement to arbitrate disputes about discrimination claims. The Uniform Arbitration Act has been amended to recognize this. 710 ILCS 5/1.

If an employer wants to include provisions relating to either of these matters, it must make these a “mutual condition of employment,” following a specific process in writing, which requires “actual, knowing, and bargained-for consideration,” and must acknowledge a series of rights by the employee. 820 ILCS 96/1-25(c). This will require careful drafting to be successful.

Restrictions on Confidentiality in Termination and Settlement Agreements. If an employer wants to make a termination or settlement agreement with an employee, promises of confidentiality related to alleged unlawful employment practices are now limited. 820 ILCS 96/1-30(a). An employer must follow a careful 6-step process for such confidentiality promises to be valid, including documenting that confidentiality is the employee’s preference and is mutually beneficial, providing separate consideration, not waiving of future claims, and providing the employee a period of time to revoke the agreement. Id. In any settlement or termination, an employer cannot unilaterally prohibit making true statements about unlawful employment practices. 820 ILCS 96/1-30(b). Failure to comply with this makes any promises of confidentiality void. 820 ILCS 96/1-30(b-c). Again, careful drafting will be necessary in any future agreements.

Attorney Fees for Employees Striking Void Provisions. The WTA also opens up new fronts of liability for unwary employers. If current, prospective, or former employee successfully challenges a contract for violation of the WTA, they will be entitled to attorney’s fees. 820 ILCS 96/1-35. Thus, it is imperative that employers pre-emptively evaluate their current templates and agreements for violations of the act, and act with caution in penning future agreements.

Should you have any questions regarding these issues, or require assistance with bringing your employment contracts and policies into compliance, please contact Colette Kopon at [email protected] or Daniel Myerson at [email protected].