Major Overhaul to Illinois Employment Law Takes Effect in January

By Matthew Feery October 2, 2019
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Major Overhaul to Illinois Employment Law Takes Effect in January

Employers already know that recent high-profile sexual-harassment cases have prompted state legislatures to enact changes. What may come as a surprise, however, is the number of other changes likely coming to Illinois employment law very soon.

SB 75,  which Gov. J.B. Pritzker recently signed and which takes effect Jan. 1, 2020, ushers in significant changes to the legal landscape for Illinois employers—and leaves little time to prepare. Here are the key changes employers should note.

Workplace Transparency Act

The bill introduces the new Workplace Transparency Act, which restricts how and when employers can use confidentiality and arbitration provisions in employment agreements.

The new law provides different enforceability standards for non-negotiable agreements that employers require workers to sign as a condition of employment and those that are freely bargained between the parties.

Under the new law, "take-it-or-leave-it" provisions that require workers to arbitrate alleged employment law violations are void if they limit the types of damages, relief or procedural options that would otherwise be available to employees in normal litigation.

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The most attention-grabbing provision may be the new limits on enforcing confidentiality requirements around alleged illegal employment practices in settlement and separation agreements. Under the new law, such confidentiality provisions are enforceable only if they meet certain criteria, which is similar to the requirements for obtaining a release of age-based claims under the Older Workers Benefit Protection Act (OWBPA):

  • The employee must prefer confidentiality, that preference must be documented, and the confidentiality provision must be mutually beneficial to the employer and employee.
  • The agreement must contain a notice to the employee of his or her right to receive legal advice before signing.
  • There must be consideration for the confidentiality provision.
  • The agreement cannot release claims arising after the execution date.
  • The employee has up to 21 days to consider the agreement.
  • The employee has seven days to revoke acceptance of the agreement, although this seven-day period can be "knowingly and voluntarily" waived, unlike under the OWBPA.

Expanded Protections Under the Illinois Human Rights Act

SB 75 also significantly expands worker protections under the Illinois Human Rights Act (IHRA).

Perhaps in response to recent high-profile cases involving sexual harassment outside the workplace, the amended IHRA now states that a hostile work environment claim is not limited to conduct that occurred in the employee's physical workspace. This expanded definition applies to sexual harassment claims, as well as claims based on all other protected characteristics under the IHRA.

The amendments also expand the IHRA's scope to cover independent contractors and consultants, as well as discrimination based on an employee's "actual or perceived" protected characteristic.

One of the more lasting effects of the amendments may come from expanded employer liability for harassment. As most employers know, the Illinois Supreme Court held in its 2009 decision Sangamon County Sheriff's Department v. Illinois Human Rights Commission that employers are strictly liable for sexual harassment by supervisors.

The decision hinged on the IHRA's language that "an employer shall be responsible for the sexual harassment of the employer's employee by nonemployees or nonmanagerial employees only if the employer becomes aware of the conduct and fails to take remedial measures."

The court reasoned that based on this language, when the offending employee is a manager, the employer is liable for the conduct regardless of whether it knew about the conduct.

Notably, the amended IHRA adopts similar language regarding employer liability for harassment based on all the protected characteristics covered by the IHRA.

Although it may take a few years for courts to rule on the application of Sangamon County to the amended IHRA, employers should brace for expanded liability based on supervisor conduct that constitutes harassment based on race, age, religion, sexual orientation, and all other characteristics covered by the IHRA. Proper training, policies, and procedures will become even more important than they already are.

Reporting Requirements

The amendments also impose new employer reporting requirements. Beginning July 1, 2020—and each year thereafter by July 1—employers must send a report to the Illinois Department of Human Rights (IDHR) about all employment-related judgments and administrative rulings against them. The report must include a breakdown of the protected characteristics—such as age, race and sex—that the adverse ruling was based on.

The department may also request settlement information from employers when investigating an employee's discrimination charge.

The IDHR will be able to force employers to report on all settlement agreements from the last five years that settled sexual-harassment allegations or discrimination claims involving workplace conduct or employee or corporate executive behavior that occurred outside the workplace.

The IDHR will annually publish aggregate data on this information, but the amendments prohibit the department from using the disclosed information against an employer when investigating a charge of discrimination.

Training and Policy Requirements

The amended IHRA also includes new sexual-harassment-training requirements that apply to all employers with employees working in the state—not just Illinois-based employers.

Under the new requirements, employers must provide sexual-harassment training to all their Illinois employees at least once a year. The training will need to meet certain criteria, and the department will soon develop a model training program that employers can use.

Employers that operate restaurants and bars have additional requirements. They must give new employees a written sexual-harassment policy within the first week of employment. Among other things, the written policy must tell employees how to report sexual harassment internally to the IDHR and to the federal Equal Employment Opportunity Commission.

Policies must be written in English and Spanish. Notably, training for restaurant and bar employees must contain more elements than the required sexual-harassment training for other industries, but the IDHR has yet to create a model training program.

The penalties for noncompliance can be steep. Fines for the first violation will be up to $1,000, up to $3,000 for the second violation, and up to $5,000 for all subsequent violations.

Matthew Feery is an attorney with Much Shelist in Chicago. 

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