The Who, What, And When On Illinois Employment Agreements

Billy Xiong Says: The Who, What, And When On Illinois Employment Agreements

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United States:

The Who, What, And When On Illinois Employment Agreements Under The Workplace Transparency Act


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The Illinois Workplace Transparency
Act
(WTA) (Public Act 101-0221) is designed to
protect employees, consultants, and contractors who truthfully
report alleged unlawful discrimination and harassment or criminal
conduct in the workplace by prohibiting nonnegotiable
confidentiality obligations, waivers, and mandatory arbitration of
allegations of discrimination, harassment, or retaliation. The
WTA became effective January 1, 2020
,
and makes these provisions void unless the agreement demonstrates
that the employer and employee mutually agreed to the provisions.
The WTA carries important implications for all sorts of employment
or consulting/independent contractor agreements, as well as
settlement agreements and termination agreements.

Who Must Comply With the Workplace Transparency Act?

The WTA applies to “employer[s],” as the term is
defined in the Illinois Human Rights Act (IHRA). Until July 1,
2020, that means that employers that have 15 or more employees
within Illinois during 20 or more calendar weeks in a calendar year
are subject to the WTA’s provisions.

On July 1, 2020, amendments to the IHRA will go into effect that
will apply the WTA to any employer with one or more employees
within Illinois during 20 or more calendar weeks in a calendar
year.

The WTA’s protections apply to employees including full-time
and part-time employees, apprentices, unpaid interns, and
to consultants and contractors who perform work for the employer
pursuant to a contract.

The WTA does not apply to collective bargaining agreements.

What Does the WTA Say About Employment Agreements?

Under the WTA, employment agreements cannot impose
nonnegotiable, unilateral conditions (i.e., conditions that
prospective or current employees must accept to obtain or keep
their jobs) that:

  • prevent prospective or current
    employees from making truthful statements about alleged unlawful
    discrimination, harassment, or retaliation;

  • require prospective or current
    employees to arbitrate claims relating to alleged unlawful
    discrimination, harassment, or retaliation; or

  • waive or otherwise diminish existing
    or future claims, rights, or benefits relating to unlawful
    discrimination, harassment, or retaliation.

These conditions may be allowed if they are part of a mutual
agreement between the employer and the employee that is:

  • written;

  • reflects “actual, knowing, and
    bargained-for consideration from both parties”; and

  • acknowledges the employee’s right
    to:

    • report a good-faith allegation of an
      unlawful employment practice or criminal conduct to the appropriate
      government authorities;

    • participate in any appropriate
      governmental agency’s enforcement of discrimination laws;

    • make truthful statements or
      disclosures required by law, regulation, or legal process; and

    • request or receive confidential legal
      advice.

If the employer does not comply with these requirements for
mutual agreements, there is a rebuttable presumption that the
condition is unilateral. Unilateral conditions are void as against
public policy, and severable from an otherwise valid and
enforceable agreement.

What Does the WTA Say About Settlement or Termination
Agreements?

Under the WTA, a settlement and termination agreement can
require confidentiality relating to alleged unlawful
discrimination, harassment, or retaliation, only if the following
requirements are met:

  • the agreement states that
    confidentiality is the employee’s preference and beneficial to
    both parties;

  • the employer notifies the employee in
    writing of the employee’s right to have an attorney or
    representative of the employee’s choice review the agreement
    before it is executed;

  • there is valid, bargained-for
    consideration in exchange for confidentiality;

  • the settlement or termination
    agreement does not waive claims of unlawful discrimination,
    harassment, or retaliation that arise after the settlement or
    termination agreement is executed;

  • the employee is given 21 calendar
    days to consider the written agreement (but the employee may
    execute the agreement waiving any remaining time to consider it);
    and

  • the employee has seven calendar days
    after executing the agreement to revoke it, and the agreement is
    not enforceable until the revocation period has expired.

Employers cannot unilaterally include any clause that prohibits
the employee from making truthful statements or disclosures
regarding unlawful discrimination, harassment, or retaliation.

When Does the WTA Prohibit Confidentiality Even in a Mutual
Agreement?

Even in a mutual agreement that meets the WTA requirements
above, employees cannot waive their right to testify in an
administrative, legislative, or judicial proceeding concerning
alleged criminal conduct or alleged unlawful employment practices
by the employer when required or requested to attend pursuant to a
court order, subpoena, or written request from an administrative
agency or the legislature. This type of waiver is void and
unenforceable as against public policy.

When Does the WTA Allow Employers to Require Confidentiality
Without a Mutual Agreement?

The WTA allows employers to require confidentiality from
employees or third parties who:

  • receive or investigate complaints of
    unlawful discrimination, harassment, or retaliation from others, or
    have access to confidential personnel information;

  • participate in ongoing investigations
    into unlawful discrimination, harassment, or retaliation during the
    pendency of and after an investigation;

  • receive attorney work product or
    attorney–client privileged communications as part of any
    dispute, controversy, or legal claim involving unlawful
    discrimination;

  • by law are subject to legal or
    evidentiary privilege; or

  • are engaged or hired by the employer
    to investigate complaints of unlawful discrimination, harassment,
    or retaliation.

Key Takeaways

Employers may want to consider whether employment agreements,
nondisclosure or confidentiality agreements, independent contractor
or consulting agreements, settlement agreements, or termination
agreements contain unilateral requirements or waivers that may be
void under the WTA and require revision. Employers may also want to
consider revising existing agreements to comply with the
requirements to demonstrate that an agreement is mutual, and to
provide the employee protections required by the statute.

The WTA’s provisions purporting to limit the use of
employment arbitration agreements for claims relating to alleged
unlawful discrimination, harassment, or retaliation may be
preempted by the Federal Arbitration Act (FAA). Employers should be
aware that the FAA does not cover transportation workers, who would
therefore be subject to the WTA’s limitations on arbitration
regardless of FAA preemption.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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