New Illinois Sexual Harassment Laws

Q: Is there a new law in Illinois prohibiting confidential settlements of harassment claims?

A: Signed into law in August 2019, Illinois Senate Bill 75 enacted the Workplace Transparency Act (WTA) and amended the Illinois Human Rights Act (IHRA) and the Illinois Governmental Ethics Act (IGEA) to place significant new obligations on all Illinois employers, including associations, relating to workplace discrimination and harassment. Among other things, the new provisions: (i) significantly restrict an employer’s right to include non-disclosure and nondisparagement provisions in employment agreements, settlement agreements and separation agreements; (ii) prohibit mandatory arbitration clauses that cover claims of harassment or discrimination; (iii) extend protections to contractors and consultants; and (iv) require employers to provide annual sexual harassment training for all employees. According to its sponsors, the intent of the legislation is to “change our culture” regarding workplace discrimination and harassment. In essence, it prohibits employers from taking any unilateral action that would compel employees to maintain their silence about such matters. Most provisions of the new law are effective as of January 1, 2020.

The WTA broadly restricts employment agreements and policies that prohibit employees from reporting allegations of unlawful discrimination or harassment to federal, state or local officials for investigation. Limited exceptions exist, however. For example, the WTA permits employee separation or settlement agreements to require confidentiality regarding unlawful employment practices if all the following conditions are met: (i) the covered harassment or discrimination claim(s) arose before the separation/settlement agreement was signed; (ii) the agreement documents that confidentiality benefits both parties and is the preference of the prospective, current or former employee; (iii) the nondisclosure provisions are in writing and supported by separate bargained-for consideration; (iv) the employee is notified in writing of his/her right to have an attorney review the negotiated separation/settlement agreement before signing it; and (v) the employee is given at least 21 days to consider the separation/settlement agreement before signing and is allowed seven days thereafter to revoke it.

The 21- and seven-day periods mirror those established by the federal Age Discrimination in Employment Act (ADEA), as amended by the Older Workers Benefit Protection Act. As is true under ADEA, an employee may waive all or part of the 21-day WTA waiting period (i.e., by signing at any point prior to its expiration). The seven-day revocation period cannot be waived.

Under the WTA, employers cannot unilaterally require current or prospective employees to waive, arbitrate or “otherwise diminish” future discrimination or retaliation claims. The parties can, however, mutually agree to such arbitration or waiver provisions if: (i) they agree in writing; (ii) the agreement demonstrates actual, bargained-for consideration by both parties; and (iii) the agreement specifically acknowledges the employee’s right to report any claims of harassment or discrimination to any appropriate agency that enforces discrimination laws and to cooperate in any agency investigation of such claims.

Employers also should pay special attention to certain IHRA amendments regarding discrimination and harassment. Specifically, where contractors or consultants perform services for an employer, the employer may be liable for acts of harassment or discrimination directed at those contractors and consultants. Under the new legislation, then, an employer’s potential liability for acts of discrimination or harassment extends beyond the organization’s employees.

Further, the IGEA amendments require that, starting in 2020, all Illinois employers (i.e., those with as few as one employee) must provide annual sexual harassment prevention training to all employees. That annual training must, at a minimum: (i) define sexual harassment; (ii) provide examples of prohibited conduct; (iii) outline the employer’s responsibility to prevent, investigate and remedy claims of sexual harassment; and (iv) summarize the relevant state and federal laws relating to sexual harassment claims.

To assist employers in implementing the required annual training program, the IGEA directs the Illinois Department of Human Rights (IDHR) to develop and publish a model sexual harassment prevention training program. Employers will be required to use the IDHR model program or to implement a training program of their own that meets or exceeds the minimum requirements of the IDHR model program.

Finally, beginning July 1, 2020, employers must report annually to the IDHR the number and nature of settlements and adverse judgments against the employer relating to claims of sexual harassment or discrimination. While those disclosures will not be subject to FOIA requests, the IDHR may use those mandatory disclosures to open an investigation into the employer’s pattern of conduct if it deems an investigation appropriate.

Considering these new employment-related requirements, associations should:

• Review all existing and new employment agreements, employee handbooks and other employment policies and agreements to remove any prohibited nondisclosure, nondisparagement and mandatory arbitration provisions;
• Ensure that any nondisclosure or nondisparagement provisions in separation agreements are separately bargained-for and provide the necessary time for review and potential revocation; and
• Implement an annual sexual harassment prevention training program that is consistent with the IDHR model program.

The answers provided here should not be construed as legal advice or a legal opinion. Consult a lawyer concerning your specific situation or legal questions.