On August 9, 2019, Illinois Governor J.B. Pritzker signed into law Public Act 101-0221, which goes into effect January 1, 2020, and places new requirements on employers related to employment contracts, training, and agency oversight that is intended to combat workplace harassment. P.A. 101-0221 includes the new Workplace Transparency Act (WTA), but also makes significant amendments to the Uniform Arbitration Act (UAA), the Illinois Human Rights Act (IHRA), and the Victims’ Economic Security and Safety Act (VESSA). Illinois joins a few states, including California, New York, Delaware, and Maine, that have passed new laws or changed laws related to sexual harassment since the #MeToo movement began in 2017.

New Rules Governing Employment Related Agreements

The WTA limits employers’ ability to include non-disclosure and non-disparagement clauses in employment agreements. Specifically, any agreement, clause, or waiver that is a unilateral condition of employment and has the “purpose or effect” of preventing an employee or prospective employee from disclosing truthful statements about alleged “unlawful employment practices,” violates the WTA. However, the Act allows these sorts of clauses in “mutual” conditions of employment if the agreement contains, among other required provisions, “actual, knowing, and bargained-for consideration” for both parties. The WTA does not apply to contracts entered into and subject to the Illinois Public Relations Act or the National Labor Relations Act.

Additionally, separation and severance agreements can only contain these types of non-disclosure/non-disparagement clauses if the following conditions are met:

• Alleged harassment or discrimination claims arose before the agreement was signed
• Clauses are mutually agreed upon and benefit both parties
• Employee/prospective employee is given 21 days to review and consider the agreement before signing and seven days after signing the agreement to revoke, which is similar to the requirements under the Older Workers’ Benefit Protection Act to release federal age discrimination claims

The Act also amends the UAA to include that “failure to comply with the terms of the WTA” may be grounds for invalidating an arbitration agreement. Legal challenges to this provision are certainly expected because the amendment appears to conflict with the Federal Arbitration Act, which preempts state law that prohibits the use of arbitration agreements. It is important for employers to watch for legal developments in this area.

Mandatory Annual Sexual Harassment Training

Employers will be required to conduct annual sexual harassment training for all employees. At the least, the training must include the following:

• Definition of sexual harassment
• Examples of unlawful conduct that constitute sexual harassment
• Summary of relevant federal and state provisions and remedies available to victims
• Employers’ responsibilities to prevent, correct, and investigate sexual harassment claims

The Act requires the Illinois Department of Human Rights (IDHR) to design a model sexual harassment prevention training program based on these criteria. The training will be available online at no cost to employers and the public. In the alternative, employers are free to design their own training program as long as it “equals or exceeds” the IDHR model. Employers who fail to conduct annual training may be subject to civil penalties up to $5,000 per offense.

Restaurant and bars must provide employees a sexual harassment policy in English and Spanish within the first calendar week of employment, as well as a supplemental IDHR model training (or their own training equivalent) in both languages. This supplemental training is specifically geared towards the restaurant and bar industry and can be held in conjunction with the general IDHR model training mentioned above.

Mandatory Adverse Judgment Disclosures

On July 1, 2020, and by each July 1 thereafter, employers must disclose to the IDHR information about adverse judgments or administrative rulings against them in the prior year in which there was a finding of “sexual harassment or unlawful discrimination.” These disclosures are not limited to adverse judgments related only to sexual harassment claims, but include harassment and discrimination claims based on any protected characteristic. Specifically, employers must disclose the following sorts of information:

• Total number of adverse judgments or administrative rulings during the preceding year, broken down by protected characteristics
• Whether any equitable relief was ordered against the employer in such proceedings

Additionally, if the IDHR is investigating a charge filed under the IHRA, it may require the employer to submit the total number of settlements entered into during the preceding five years that relate to sexual harassment or unlawful discrimination occurring in the workplace or involving an employee or corporate executive.

Although the IDHR will publish an annual report aggregating the employers’ adverse judgment data, it will not disclose individual employer data by name to the public. Such information is confidential and will not be subject to disclosure under a Freedom of Information Act request. Employers will face civil penalties up to $5,000 per offense if they fail to comply with these reporting obligations.

IHRA Amendments

The WTA amends the IHRA in other ways that employers should be aware of, including the following:

• Alters definition of “harassment” to now include unwelcome conduct based on actual or “perceived” membership in a protected class, where the conduct “has the purpose or effect of substantially interfering with the individual’s work performance or creating an intimidating, hostile, or offensive working environment”
• Clarifies that “working environment” is not limited to the physical location where the employee works
• States that employers are not responsible for harassment by non-managerial/supervisory employees, unless employers became aware of the conduct and failed to take reasonable corrective measures
• Permits non-employees (independent contractors and consultants) to bring harassment claims

The Act also amends VESSA, which currently requires employers to provide 8-12 weeks of unpaid, job-protected leave after an employee experiences domestic or sexual abuse. The Act now includes “gender violence” amongst the qualifying reasons for taking leave under VESSA and affected employees will be awarded the same leave entitlements.

How Employers Can Have 20/20 Vision for These 2020 Policy Changes

With under five months to prepare, employers should begin reviewing their current agreements and policies and assess whether they are consistent with WTA requirements. Employers should carefully analyze the various settlement templates, separation agreements, non-disclosure language, and existing arbitration policies in order to ensure they are compliant before January 1. Employers are subject to paying the attorneys’ fees of employees and prospective employees who successfully challenge these agreements and policies under the Act.

Employers should also review their existing sexual harassment training to ensure it meets WTA criteria or plan to implement the IDHR model training (or something similar of their own) when it becomes available to the public. Although the IDHR’s mandatory disclosure requirements will not start until July 1, 2020, employers should begin putting systems in place now in order to effectively track the required information that has to be reported.