Employment Law Update
Monday, December 23, 2019
With the election of a new democratic governor in Illinois, 2019 saw significant legislative changes to the employment laws in the State. This makes it difficult for many employers to keep up with all their obligations under the ever-evolving laws. Several significant new laws will go into effect on January 1, 2020 which will change the way employers operate. Several important changes which apply to firms and companies of all sizes should be noted.
Illinois Workplace Transparency Act
On August 9, 2019, Governor J.B. Pritzker signed the Illinois Workplace Transparency Act (WTA) which amends multiple state laws that affect Illinois employers or employers whose employees work in Illinois. Below is a brief overview of the more significant provisions of this omnibus legislation.
Non-disclosure and disparagement provisions in employment agreements
The WTA bars agreements that prevent former, prospective, or current employees from reporting to federal, state or local authorities unlawful conduct, including criminal conduct and unlawful employment practices, such as sexual harassment, discrimination, and retaliation. Additionally, the WTA bars the use of unilateral non-disparagement and non-disclosure agreements that demand confidentiality relating to discrimination, harassment and retaliation as void and against public policy.
The WTA permits, however, parties to enter into mutual agreements that “include provisions that would otherwise be unilateral and against public policy” only if the agreement: (1) Is in writing; (2) Demonstrates equal, actual, knowing, and bargained for consideration from both parties; and (3) Acknowledges the employee’s right to report good faith allegations of unlawful employment practices and criminal conduct to authorities, to participate in proceedings with enforcement agencies, to make truthful disclosures required by law, and to request and receive legal advice.
Arbitration agreements related to employment
The WTA bars any unilateral agreement that attempts to waive, arbitrate or diminish the right to pursue existing or future claims of harassment, discrimination or retaliation under federal or state law. The Illinois Uniform Arbitration Act was similarly amended to require arbitration agreements to comply with the provisions of the WTA to be enforceable, with exceptions for hospitals and health care providers.
It should be noted, however, that the lack of clarity in arbitration law over the meaning of the terms substantive and procedural rights as well as difficulties reconciling the arbitration provisions of the WTA with the Federal Arbitration Act will result in litigation to determine the extent to which the WTA’s arbitration provisions are enforceable.
Non-disclosure and disparagement provisions in settlement or termination agreements
Settlement or termination agreements with unilateral provisions barring disclosure of harassment, discrimination and retaliation are prohibited. However, the parties may agree mutually in writing to a confidentiality provision in a settlement or termination agreement regarding unlawful employment practices so long as the following conditions are met:
The agreement is mutually agreed to by both parties and is the documented preference of the current, former or prospective employee;
The agreement applies only to claims arising before the execution of the settlement or termination agreement;
The agreement is supported by valid bargained for consideration;
No waiver of unlawful employment practices exists for events that occur after the execution of the agreement;
The agreement provides the current, former or prospective employee 21 days to consider the agreement and to consult an attorney prior to execution; and
The agreement is not effective until the expiration of a seven-day revocation period.
Current, former and prospective employees who successfully challenge the validity and enforceability of an agreement under the WTA are entitled to costs and attorney’s fees.
The Illinois Human Rights Act
The WTA makes several changes to the Illinois Human Rights Act (Act).
The WTA significantly extends a cause of action for harassment to cover unwelcome conduct based on an individual’s “actual or perceived” race, color, religion, national origin, ancestry, age, sex, marital status, order of protection status, sexual orientation, pregnancy, unfavorable discharge from military services or citizenship status that substantially interferes with work performance or creates an intimidating hostile or offensive working environment. Additionally, the definition of work environment protects the employee beyond the physical location to which the employee is assigned to work.
The WTA extends the protections against harassment to non-employees. Employers will be held liable to non-employees and employees for harassment by non-managerial, non-supervisory employees to the extent the employer is aware of the harassment and fails to take corrective action.
The WTA also places a new obligation on employers to institute annual mandatory sexual harassment prevention training for virtually all employees who work in the State of Illinois. The training program must either use a model sexual harassment prevention training program developed by the Illinois Department of Human Rights (Department) or another program equivalent to the Department’s program. Failure to institute the mandatory training program subjects the employer to civil penalties.
Lastly, beginning on July 1, 2020, the WTA places a new obligation on employers to disclose annually to the Department any final, non-appealable, adverse judgment or administrative ruling against it in the preceding year for any discrimination, harassment or retaliation actionable under the Act in favor of an employee or nonemployee to whom the employer owes a duty under the Act. Additionally, the Department may also require an employer which is a party in an investigation by the Department to disclose the total number of settlements the employer has entered into for up to the past 5 years regarding an alleged act of sexual harassment or unlawful discrimination by category of protected characteristics. The employers are barred from disclosing the names of the victims. Data submitted by the employer is exempt from disclosure under FOIA. Employers that fail to comply with the disclosure requirements are subject to civil penalties. The mandatory disclosure requirement includes a sunset provision repealing the disclosure obligation as of January 1, 2030.
Victim Economic Security and Safety Act (VESSA)
VESSA, a law which helps victims of domestic and sexual violence, was expanded to include gender violence. Gender violence is defined as violent or aggressive acts that are committed at least in part on the basis of a person’s actual or perceived gender or sex and that constitute a criminal offense. This includes coverage of electronic communications on social media, website or application.
The Illinois Cannabis Regulation and Tax Act
In addition to the significant changes put in place by the omnibus WTA legislation, on January 1, 2020 the Illinois Cannabis Regulation and Tax Act (the “Act”) will go into effect. The Act will legalize the recreational use of marijuana in Illinois. While medical marijuana use has been legal in Illinois for several years, the legalization of recreational use will bring about many challenges for employers.
Under the Act, employers may not discipline or terminate employees for a positive marijuana drug test unless the employee is intoxicated on the job. Employees who are fired or disciplined for off-duty use may sue their former employer for lost wages and legal fees under the Illinois Right to Privacy in the Workplace Act.
The problem for Illinois employers at this time is that there are currently no tests available which will show whether an employee is intoxicated by marijuana at the time of testing. Current tests can detect marijuana in a person’s system going back almost a month. This puts Illinois employers in a difficult position. Until new testing is developed, or the law is changed or developed through case law, employers will have to tread carefully when terminating employees for a positive marijuana drug test.
Anne Mayette, Attorney at Husch Blackwell, concentrates her practice on matters involving business and commercial litigation, with a specific focus on commercial lease disputes and employment law. Anne has significant experience with employment law, including unpaid wages, minimum wage and overtime violations, FMLA, ERISA, employment contracts, breach of contract, shareholder derivative actions, and employment discrimination claims under Title VII, ADEA and ADA.