This summer Gov. Pritzker signed the Workplace Transparency Act (WTA) into law. Like New York New Jersey, and California, Illinois politicians cannot resist giving employers a reason to flee the state. Most of the new law goes into effect on January 1, 2020. Illinois employers should prepare now to comply with the law.
Arbitration Agreements
The WTA amends the Illinois Uniform Arbitration Act to require employers that utilize arbitration agreements to exclude claims of harassment and discrimination from the arbitration requirements. The statute states that "[A]n arbitration clause shall contain a written exception for claims of harassment or discrimination . . . and shall allow an employee or applicant to pursue such claims against the employer through either arbitral or judicial forums." An arbitration agreement entered into on or before the effective date of the Act shall be voidable by the party if they signed the agreement under duress, while incompetent to do so, or as a minor.
The statute also creates rebuttable presumptions that certain terms of an arbitration agreement are unconscionable unless the agreement was drafted by the employee, such as, inter alia: an inconvenient venue; a waiver of the right to seek claims or remedies provided by federal or state statute; a waiver of the right to seek punitive damages; shortening the time limit for demanding arbitration to less than the statute of limitations; a requirement that the employee pay fees and costs substantially in excess of those in state and federal courts.
The legal validity of Illinois' WTA may be challenged on federal preemption grounds, like New York's version has been.
Nondisclosure and Non-disparagement Clauses
The WTA generally prohibits employers from entering into employment agreements that contain nondisclosure and/or non-disparagement clauses related to harassment or discrimination claims. However, such clauses can be included in separation or settlement agreements if:
- the claim arose before the agreement was executed;
- the nondisclosure and/or non-disparagement clause is the documented preference of the employee and is mutually beneficial to both parties;
- the employee is notified, in writing, of the right to have an attorney or representative review the agreement before it is executed;
- there is bargained for consideration in exchange for the confidentiality;
- the employee has 21 days to consider the agreement; and
- the employee has seven (7) days following execution to revoke the agreement.
Next week, we will discuss the new laws reporting and training requirements. Call any Spognardi Baiocchi LLP attorney if you need help with compliance in this area.
With year end around the corner, take note that many local and state employment law change loom as well. Spognardi Baiocchi will dedicate a few articles to some changes around the nation in our last few weeks prior to 2020. Please note that these articles are certainly not meant to cover all local and state changes occurring, rather just highlighting some note worthy ones. Contact the Spognardi Baiocchi Attorney of your choice to discuss these changes or what may be going on in your jurisdiction!
