June 20, 2019

Gearing Up for the Workplace Transparency Act: A Checklist for Illinois Employers

Originally published on June 20, 2019 (amended August 14, 2019).

The Illinois legislature recently approved the Workplace Transparency Act (WTA) – a sweeping piece of legislation that imposes a variety of restrictions and requirements on employers relating to workplace discrimination and harassment. As expected, on August 9, 2019, Governor Pritzker signed the act into law, and now Illinois employers are facing a radically different labor and employment landscape starting in 2020.

Limitations on Employment Agreements 

Under the WTA, employers are prohibited from entering into employee agreements (including separation or settlement agreements) that contain nondisclosure and/or non-disparagement clauses for claims of harassment or discrimination. However, employers can enter into separation or settlement agreements with nondisclosure and/or non-disparagement clauses 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.

Limitations on Arbitration Agreements

Although employers are still permitted to use arbitration agreements, they may only do so if the arbitration agreement excludes discrimination and harassment claims. The prohibition on arbitration of discrimination and harassment claims appears to conflict with the Federal Arbitration Act. But, employers will be faced with uncertainty in how this provision will be enforced against employers until there is a judicial opinion addressing the conflict.

Expanded Definitions of Discrimination and Harassment

The WTA amends the Illinois Human Rights Act (IHRA) to prohibit actual or perceived discrimination and/or harassment based on a protected characteristic under the IHRA, including: race, color, religion, national origin, ancestry, age, sex, marital status, order of protection status, disability, military status, sexual orientation, pregnancy, or unfavorable discharge from military service. Previously, causes of action for “perceived” discrimination or harassment were limited to disability claims. “Perceived” discrimination or harassment claims allow employees to allege that they were subject to unwelcome conduct based on a protected characteristic their employee “perceived” them to have, regardless of whether the individual actually has that characteristic.

Expanded Definition of Working Environment 

The WTA defines the phrase “working environment” as not limited to a physical location an employee is assigned to perform his or her duties. Previously, this phrase was not defined and seemed to suggest that harassment/sexual harassment was either limited to interfering with the individual’s work performance or actual physical location where the employee was assigned to work. This expanded definition makes clear that an intimidating, hostile, or offensive working environment is no longer limited to the physical location where an employee is assigned to perform his or her work.

Expanded Application of IHRA to Contractors

The WTA further amends the IHRA to specifically provide protections to “nonemployees,” such as contractors and consultants. Consequently, employers could be held liable for harassing conduct that substantially interferes with contractors’ work performance or creates an intimidating, hostile or offensive working environment for them as members of a protected class.

Liability for Employer’s Nonmanagerial and Nonsupervisory Employees

 An employer is responsible for harassment or sexual harassment by the employer’s nonmanagerial and nonsupervisory employees only if the employer becomes aware of the conduct and fails to take reasonable corrective measures. Previously, the IHRA prohibited harassment/sexual harassment of the employer’s employees by nonemployees or nonmanagerial and nonsupervisory employees under the same standard. This addition now explicitly makes employers also responsible for the harassment/sexual harassment of nonemployees by nonmanagerial and nonsupervisory employees.

Expanded Definition of Violence Includes Gender

Under the Victims’ Economic Security and Safety Act (VESSA), an employee who is a victim of domestic, sexual, or gender violence may take up to twelve (12) weeks of unpaid leave from work during a twelve (12) month period to seek medical help, legal assistance, counseling, safety planning, and other assistance without penalty from their employers.

The WTA amends VESSA to require employers to grant leave to employees who are gender violence victims, or with families or household members who are gender violence victims. “Gender violence” is an act of violence on the basis of a person’s actual or perceived sex or gender. The amendment will also prohibit employers from discriminating against gender violence victims. Previously, VESSA applied only to “domestic or sexual violence” victims.

Employer Disclosure Requirements

Beginning July 1, 2020 (and by each July 1 thereafter), employers and parties to a public contract in Illinois are required to disclose annually to the Illinois Department of Human Rights (IDHR):

  • Total number of settlements entered into during the preceding year by the employer or corporate executive of the employer that relate to any alleged act of sexual harassment or unlawful discrimination.
  • Breakdown of the number of settlements based on protected characteristics.
  • Total number of adverse judgments or administrative rulings during the preceding year.
  • Whether any equitable relief was ordered against the employer in any adverse judgment or administrative ruling.
  • Total number of adverse judgments or administrative rulings based on protected characteristics.

The IDHR may use the information disclosed to open a preliminary investigation into pattern and practice violations. Noncompliance with reporting obligations could result in civil penalties up to $5,000 per offense.

Annual Sexual Harassment Prevention Training

Employers are now required to provide annual sexual harassment prevention training to all employees, which at minimum, must:

  • Define sexual harassment.
  • Provide examples of prohibited conduct.
  • Identify employer responsibility to prevent, investigate and address sexual harassment.
  • Summarize federal and state laws addressing sexual harassment, including available remedies.

The IDHR will make available a model sexual harassment prevention training program that meets these criteria. Employers must either use the model program or establish training that exceeds the minimum standards provided by the model training.

Noncompliance with this section may subject employers to civil penalties up to $5,000 per offense.

Specific Rules That Apply to Restaurants and Bars

 Restaurants and bars are required to have a sexual harassment policy provided to all employees, in writing, within the first calendar week of the employee’s employment.

Recommended Next Steps

The WTA was approved by Governor Pritzker on August 9, 2019, and the WTA will largely go into effect on January 1, 2020 (with the exception of the employer disclosure requirement noted above). 

Employers are strongly recommended to review their employment, separation, and arbitration agreements, policies on discrimination, harassment, violence, and leave; evaluate whether their internal sexual harassment training program meets the WTA’s minimum requirements; and begin preparing to comply with the mandatory reporting requirements. Further, restaurant and bar employers must prepare to issue a sexual harassment policy to all employees.

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