The Workplace Transparency Act (WTA) and What it Means For Your Business

Similar to new legislation passed in New York and California, the Illinois legislature has passed a bill to protect employees. Known as the Workplace Transparency Act (WTA), this Act was signed into law by Illinois Governor Pritzker. Employers are advised to be aware of how the bill affects their business.

What is the WTA?

The Workplace Transparency Act applies to certain provisions as outlined in employment agreements. Specifically, non-disclosure agreements and non-disparagement agreements cannot be used to prevent employees from making truthful statements or disclosures that shed light on suspected unlawful or criminal employment practices.

When does the WTA go into effect?

January 1, 2020, marks the date the Workplace Transparency Act goes into effect. All employee contracts, clauses, agreements and waivers that are entered into, modified in any way or extended on this date and during any point after are subject to the new Illinois Act.

Who does the WTA apply to?

The Workplace Transparency Act applies to contracts with both employees and non-employees. The latter may be identified as individuals who directly perform services for an employer in accordance to a contract. For example, these non-employees may hold roles as consultants or contractors.

Amendments to the Illinois Human Rights Act have been included in the Workplace Transparency Act. These amendments also officially go into effect on January 1, 2020. What is considered a worksite and who is deemed an employer has been revised in the amendments.

The amendment describes an employer as an entity that employs at least one person. Currently, to be protected requires a 15-employee threshold. The limits of where an employee works is also expanded to include remote environments and work completed outside of established workplaces.

What may an employment agreement include?

Following the new Illinois Act, an employment agreement may include a non-disclosure, an arbitration and a non-disparagement clause upon meeting certain qualifications. The employment agreement must be in writing and should show actual and bargained considerations from both sides involved.

The agreement must also acknowledge certain rights of the employee, such as the employee retaining the right to report allegations of an employer’s criminal misconduct, perceived illegal activities or any other unlawful employment practices to local, state and federal law enforcement officials.

Additionally, the agreement must specify the right for the employee to engage in proceedings with local, state and federal law enforcement agencies. The employee has the right to request and receive legal advice as well as make truthful disclosures or statements as required by judicial processes and law.

The Workplace Transparency Act also prohibits the addition of a clause that prevents employees from pursuing a settlement agreement as a result of asserting truthful statements or disclosures in relevance to unlawful employment activities under the Illinois Human Rights Act.

Limits on the use of arbitration agreements also are in effect. Provisions in an employment agreement that compel the employee to waive or arbitrate any current or future claims in regard to unlawful employment practices are prohibited under the Workplace Transparency Act.

Under the new Act, an employee has the right to seek the recovery of attorney fees and any costs associated with pursuing legal action against the employer who violated an employment agreement contract or contractual provisions in regard to the Workplace Transparency Act.

Can employers require arbitration?

The Workplace Transparency Act prohibits employers from requiring arbitration of claims that stem from Equal Employment Opportunity Commission (EEOC) laws or the Illinois Department of Human Rights (IDHR) laws. Required arbitration clauses may be deemed void, especially if they deny procedural rights.

Can employers condition employment?

Under the new Act, an employer cannot condition employment based on an agreement that prevents the employee from making truthful statements in regard to violations of EEO laws. Similarly, continued employment cannot be based on such agreements under the Workplace Transparency Act.

An example of conditioning employment might be to add a confidentiality clause to an employment agreement that prohibits the employee from reporting EEO violations. Under the new Illinois Workplace Transparency Act, such clauses are not permitted when presenting an employment agreement.

How are employee termination agreements handled?

Equal Employment Opportunity (EEO) violations, under the Workplace Transparency Act, affect termination and separation agreements in several ways. Confidentiality covenants included in the termination agreements are permissible under the following circumstances:

The employee prefers confidentiality and the employee’s preference is mutually beneficial to all parties involved. The exchange of confidentiality has been validly considered and bargained for. Even after the agreement is executed, accrued claims regarding EEO violations cannot be waived.

The Workplace Transparency Act gives the employee 21 days to consider the termination agreement before it is officially executed. Following the execution of the agreement, the employee has seven days to revoke the agreement—unless voluntarily waived by the employee.

Illinois employers and those who enlist the services of contractors and consultants in our state are encouraged to review their policies, employment contracts, arbitration agreements and employee handbook provisions to ensure they are in compliance with the Workplace Transparency Act.

Employers will benefit from the guidance provided by HRBOOST®, a strategic human resources management firm dedicated to adding value to the businesses with whom we partner. We’ll help you understand the details of the Workplace Transparency Act and how such laws affect your company.

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