Illinois Gov. J.B. Pritzker signed comprehensive legislation on Aug. 9 aimed to prevent sexual harassment and discrimination in the workplace. This omnibus legislation, which will go into effect on Jan. 1, 2020, imposes significant new responsibilities on employers.

Workplace Transparency Act

One of the new laws created in this legislation is the Workplace Transparency Act (WTA). It addresses many aspects of workplace discrimination and harassment, including limiting non-disclosure and non-disparagement clauses, limiting arbitration agreements, mandating sexual harassment training, expanding protection to nonemployees, and requiring annual disclosures. Employers who do not comply with the reporting and training requirements may be subject to monetary penalties. 

Limiting Non-Disclosure and Non-Disparagement Clauses

Under the WTA, employers are prohibited from entering into agreements with an employee that contain nondisclosure and/or non-disparagement clauses that cover claims of sexual harassment or discrimination. However, WTA does not prohibit employers from including nondisclosure and/or non-disparagement clauses in settlement or separation agreements if all the following conditions are present:

• The claim at issue arose before the settlement/separation agreement was executed.
• The parties both agree on the nondisclosure and/or non-disparagement clause.
• The employee/applicant has 21 days to consider the agreement before executing.
• The employee/applicant has seven calendar days following the execution of the agreement to revoke the agreement.

Limiting Arbitration Agreements

According to the WTA, arbitration agreements that include sexual harassment and/or discrimination claims are unenforceable. In other words, arbitration agreements should be carefully drafted to include written exceptions for sexual harassment or discrimination claims. However, this prohibition of sexual harassment or discrimination claims in arbitration agreements seems to be in conflict with the Federal Arbitration Act. Until there is a judicial decision addressing this conflict, employers will face uncertainty in how this provision will be enforced.

Expanding Protection to Nonemployees

WTA amends the Illinois Human Rights Act (IHRA) to extend protection from harassment to include nonemployees, which includes contractors, subcontractors, vendors, and consultants. Employers could be held liable for harassment that substantially interferes with a nonemployee’s work performance or creates an intimidating, hostile, or offensive working environment as members of a protected class. However, employers are only liable for harassment by a non-managerial and/or non-supervisory employee if the employer became aware of the conduct and failed to take reasonable corrective measures.

Mandating Sexual Harassment Training

WTA obligates employers to provide annual sexual harassment prevention training to all employees. The training must equal or exceed standards of the model training program that will be published by the Illinois Department of Human Right (IDHR). WTA has not specified when IDHR will be releasing the training program or when employers are required to complete the initial training, but the details are expected to be revealed as the implementation of the WTA progresses.

Requiring Annual Disclosures

Beginning July 1, 2020 and every July 1 thereafter, all employers, labor organizations, and parties to a public contract are required to report annually to the IDHR any settlements, adverse judgments, or administrative rulings against them involving harassment or discrimination that occurred in the preceding year. The required disclosures include the total number of settlements or judgments, a breakdown of the number of settlements or judgments based on protected characteristics under the IHRA, and whether any equitable relief was ordered against the employer. The information reported to the IDHR would not be subject to any production in response to FOIA requests. However, the IDHR will compile the information received and will publish an annual report, which will include the number of settlements or judgments but will not include any employer information. Failure to comply with the annual reporting requirements could result in monetary penalties.

Sexual Harassment Victim Representation Act      

The new legislation also creates the Sexual Harassment Victim Representation Act, which prohibits unions from designating the same representative for the victim and the accused perpetrator. Under this act, when a union member is a victim of sexual harassment by a member of the same union, that union must assign different union representatives for the victim and the accused perpetrator.

Next Steps

Before the new year arrives, employers should review and revise existing employment contracts, confidentiality agreements, separation/severance agreements, and arbitration agreements. Employers should also be ready to evaluate and revise their sexual harassment and discrimination policies and procedures before the IDHR model training program is released.