The Workplace Transparency Act (WTA) took effect in Illinois just two months ago across the state. Employers and employees alike should understand their rights and obligations under the new law. The Illinois General Assembly passed the law last June in connection with other laws related to sexual harassment. The law is similar to other laws passed in New York and California in response to the #MeToo movement. Legislators want to prevent workplace situations in which employees were not allowed to discuss their harassment allegations once their case was settled. Given that the WTA is now in effect, employment law changes will need to occur for new hires and for exiting employees.
Under the new law, employers who are making new hires need to understand the limits of non-disclosure agreements. Employers cannot create employment agreements that include clauses or covenants designed to prevent an employee from disclosing harassment at work. More significantly, employers cannot include clauses or covenants that have the effect of preventing an employee from making disclosures. To be clear, employers do not have to intend to prevent an employee from reporting discrimination with a non-disclosure agreement. However, if an agreement or clause has that effect, it is unlawful under the WTC. Accordingly, the WTC aims to support current or former employees who want to come forward with discrimination or harassment claims. The enactment of the WTC coincides with greater employee protections under the Illinois Human Rights Act (IHRA).
The WTC takes additional steps beyond prohibiting certain types of agreements, clauses, and covenants in employment contracts. Indeed, it also prohibits employers from compelling arbitration for discrimination issues and other particular disputes. To be sure, the WTC says that mandatory arbitration may not be compelled in Illinois. In addition, the WTC provides protections for employees presented with settlement agreements. To ensure that employees can properly consider a settlement offer, the WTC requires specific time windows for acceptance and revocation. All employees must have 21 days to consider a settlement agreement. In addition, all employees must have 7 days to revoke a settlement agreement after signing it.
According to Chicago employment discrimination attorney Jonathan C. Goldman, “employers and employees need to be clear about new rights and obligations under the WTA.” As underscored, “certain types of non-disclosure agreements are not appropriate, and settlement agreements must have particular time windows.” Non-disclosure agreements, non-disparagement provisions, and settlement agreements must be analyzed carefully under the WTC. Indeed, many common employment agreement provisions may not be lawful if they could limit or prevent discrimination allegations.