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The Illinois Workplace Transparency Act’s Affect on Sexual Harassment Nondisclosure and Nondisparagement Clauses

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The Illinois Workplace Transparency Act’s Affect on Sexual Harassment  Nondisclosure and Nondisparagement Clauses

In a prior blog, I discussed Illinois’ continuing attempts to curb sexual harassment through its enactment of Public Act 101-0221. One important aspect of Public Act 101-0221 is the Illinois Workplace Transparency Act. The Illinois Workplace Transparency Act has several anti-sexual harassment provisions, including prohibiting certain nondisclosure and nondisparagement clauses in employment contracts and curtailing their use in settlement agreements.

A nondisclosure clause is a provision in an employment agreement or settlement agreement that prohibits certain disclosures. Typical non disclosures clauses relate to prohibiting disclosure of customer information, trade secrets, investigations and claims of discrimination, and settlements of any claims. A nondisparagment clause is also a provision in both employment agreements and settlement agreements and prohibits the individual from making disparaging comments about the employer.

How does the Illinois Workplace Transparency Act Apply to Employment Contract Restrictions on Nondisclosure and Nondisparagement Clauses?

The Workplace Transparency Act provides that an employer shall not enter into a contract or agreement with an employee or applicant if that contract or agreement contains a nondisclosure or nondisparagement clause or forced arbitration clause that covers workplace harassment or discrimination, including sexual harassment or retaliation for reporting, resisting, opposing, or assisting in the investigation of workplace harassment or discrimination.The Workplace Transparency Act provides restrictions on anti-disclosure and anti-disparagement clauses in employment agreements:

An employer may not enter into a contract or agreement with an employee or applicant, as a condition of employment, promotion, compensation, benefits, or change in employment status or contractual relationship, as a term, condition, or privilege of employment, if that contract or agreement contains a nondisclosure or nondisparagement clause that covers harassment or discrimination as provided under Section 2-102 of the Illinois Human Rights Act. Any such nondisclosure or nondisparagement clause is severable, and all other provisions of the employment contract shall remain in effect.

In addition, the Act prohibits employers from attempts to enforce the anti-disclosure or anti-disparagement clauses in the context of sexual harassment:

[A]n employer may not enforce or attempt to enforce a nondisparagement clause or nondisclosure clause described in subsection (a) or retaliate against an employee or applicant for reporting, resisting, opposing, or assisting in the investigation of harassment or discrimination as provided in Section 2-102 of the Illinois Human Rights Act.

Does The Illinois Workplace Transparency Act Apply to All Forms of Harassment?

The purpose of Illinois Workplace Transparency Act is to curb sexual harassment in the workplace. It also extends to all forms of discrimination under the Illinois Human Rights Act as defined by Section 775 ILCS 5/1-201 including both perceived and actual race, color, citizenship status, national origin, ancestry, age, handicap, marital status, gender, religion, sexual orientation, military service or unfavorable military discharge status as well as sexual harassment and sexual harassment retaliation.

The definition of “harassment” was recently broadened by the amendments to the Human Rights Act as follows:

Harassment. “Harassment” means any unwelcome conduct on the basis of an individual’s actual or perceived race, color, religion, national origin, ancestry, age, sex, marital status, order of protection status, disability, military status, sexual orientation, pregnancy, unfavorable discharge from military service, or citizenship status that has the purpose or affect of substantially interfering with the individual’s work performance or creating an intimidating, hostile , or offensive working environment. For purposes of this definition, the phrase “working environment” is not limited to a physical location an employee is assigned to perform his or her duties.775 ILCS 5/1-103 (e-1)

Does the Illinois Workplace Transparency Act Apply to Settlement Agreements?

The Act does not bar a nondisclosure clause or nondisparagment clause contained in a settlement agreement or separation agreement, but it does provide restrictions.

First, the parties to the agreement must mutually agree to the language and the following criteria must be met:

  • The legal claims accrued, or the disputes arose before the settlement agreement or separation agreement was executed;
  • The confidentiality clause is agreed upon and mutually beneficial to both parties;
  • The settlement agreement is provided to all parties, unless knowingly and voluntarily waived by the employee or applicant, and the employee or applicant has 21 calendar days to consider the agreement before it is executed; and
  • Unless knowingly and voluntarily waived by the employee or applicant, the employee or applicant has 7 calendar days following execution of the agreement to revoke the agreement and the agreement is not effective or enforceable until the revocation period has expired.

Second, the settlement agreement or separation agreement may not contain a nondisclosure or nondisparagment clause that restricts the applicant or employee from reporting a concern about workplace harassment or discrimination, including sexual harassment or other violations of the law, to the Department of Human Rights or any other federal, state or local agency.

What is the Effective Date of the Illinois Workplace Transparency Act?

The Illinois Workplace Transparency Act takes effect on January 1, 2020. Beginning on that date, every agreement entered into must follow the Illinois Workplace Transparency Act and may no longer include any prohibitions against employees or prospective employees from making truthful statements or disclosures about alleged unlawful employment practices or criminal activity.

In a separate future blog, I will discuss the employer’s obligations starting July 1, 2020 to report sexual harassment settlements to the Illinois Department of Human Rights.

Illinois Employers Should Review Their Employment Agreements for Compliance With the Illinois Workplace Transparency Nondisclosure and Nondisparagment Provisions.

The Illinois Workplace Transparency Act will be in effect in less than two months. Employers should look at their employment contracts for compliance with this Act. For an overview of Illinois’ new sexual harassment laws, please read my blog Illinois Employers Need to Be Aware of New Sexual Harassment Protections.

If you have any questions or want to have a review of your sexual harassment policies please contact Kristin Tauras. Kristin has presented seminars to clients on identifying and curbing sexual harassment in the workplace. She focuses her practice on helping employers with employment litigation matters.

Categories Employment Law



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