The #MeToo movement ignited a political firestorm that eventually caught the attention of legislators across the country. Today, Governor Pritzker signed into law a sweeping legislative package adding Illinois to the growing list of states that have enacted laws aimed at curbing sexual harassment and discrimination in the workplace. The legislation, which will take effect on January 1, 2020, creates several new laws, modifies others, and brings a host of requirements and limitations on Illinois employers with respect to harassment and discrimination.
The key changes under the new law include:
- Mandating sexual harassment training and reporting for all employers
- Limiting non-disclosure and non-disparagement clauses
- Banning certain arbitration clauses
- Expanded protections to independent contractors
- Amended posting and disclosure requirements for certain businesses
- New union representation rules relating to intra-union sexual harassment claims
Sexual Harassment Training and Annual Reporting
The new law creates the Workplace Transparency Act (WTA). Under the WTA, all employers must provide annual sexual harassment prevention training that meets or exceeds the standards provided under a model training program that will be published by the Illinois Department of Human Rights (IDHR). The program will include an explanation of sexual harassment, examples of prohibited conduct, a summary of applicable laws about sexual harassment, and a summary of employee rights regarding sexual harassment. Employers who fail to provide this training could face financial penalties.
In addition, beginning on July 1, 2020, and by each July 1st thereafter, all private or public employers, labor organizations, and parties to a public contract must annually report to IDHR any adverse judgment or administrative ruling against them involving harassment or discrimination that occurred within the preceding year. If the IDHR begins investigating a charge of discrimination or harassment against an employer, the IDHR also may request that the employer report the total number of settlements (involving harassment or discrimination) that it has entered into during the preceding five years. The disclosures will require employers to list the number of judgments or rulings, the type of protected class and/or conduct that each judgment or ruling involved, and whether any equitable relief was ordered. Employers’ annual disclosures would not be subject to production in response to FOIA requests nor would any individual employer be identified by its disclosures. However, the IDHR will aggregate the data it receives and publish an annual report. Further, if an employer’s disclosures suggest a pattern and practice of unlawful discrimination, the IDHR may open a preliminary investigation, and could initiate a civil rights charge against that employer based on its findings.
Limitations on Non-disclosure, Non-disparagement, and Arbitration Clauses
The WTA also limits employers’ ability to utilize non-disclosure and non-disparagement clauses in employment agreements to cover claims of sexual harassment. Any agreement, clause, or waiver that is presented as a condition of employment and has “the purpose or effect” of preventing an employee or prospective employee from disclosing unlawful employment practices risks violating the WTA. The law provides some leeway to create such clauses under a “mutual” condition of employment, but such an agreement likely will require some type of additional consideration to the employee. Additionally, separation and severance agreements can only contain these types of clauses if the following requirements are met: (i) the alleged harassment or discrimination claims arise before the agreement is signed; (ii) the clauses are mutually agreed upon and benefit both parties; (iii) the employee or applicant is given 21 days to review and consider the agreement before signing; and (iv) the employee or applicant has 7 days after signing the agreement to revoke it and the agreement is not enforceable until the 7-day revocation period ends.
Arbitration agreements must be drafted carefully as the WTA requires that arbitration clauses include written exceptions for harassment and discrimination claims. An improperly drafted clause will render the provision unenforceable. More specifically, arbitration agreements drafted by employers may not: (i) shorten applicable limitation periods for claims; or (ii) limit an employee’s right to assert claims or remedies available under state or federal law. This provision may draw legal challenges due to its potential conflicts with existing precedent, so it is important to continue watching for legal developments in this area.
Similarly, the WTA prohibits any contractual provisions that aim to ban, prevent, or otherwise restrict an employee, applicant, or former employee from reporting any allegations of unlawful conduct to federal, State, or local officials for investigation.
Protection Extended to Independent Contractors
Under the WTA, employers could be held liable for harassing conduct that substantially interferes with the work of an independent contractor or creates a hostile work environment adversely affecting a contractor. Employers are only liable for harassment by a non-managerial and/or non-supervisory employee if the employer became aware of the conduct and failed to take reasonable corrective measures.
Unpaid Leave for Treatment Following Sexual Harassment
The Illinois Victims’ Economic Security and Safety Act (VESSA) requires employers, depending on their size, to provide four to 12 weeks of unpaid leave for employees to obtain medical, psychological, or other services after experiencing domestic or sexual violence. This new legislation amends VESSA to include sexual harassment among the qualifying reasons for taking protected leave. For VESSA purposes, “sexual harassment” need not have any connection to the workplace to trigger the leave requirements.
Right to Separate Union Representation
The new legislation also creates the Sexual Harassment Victim Representation Act, which affects employee representation during labor proceedings involving sexual harassment claims. Specifically, where a victim has accused a perpetrator within the same union of sexual harassment, the victim and perpetrator cannot be represented by the same union representative. Instead, the union must designate separate representatives to represent the parties.
This law adds several new obligations for Illinois employers and provides an opportunity to evaluate sexual harassment and discrimination policies and practices. This will be an evolving area for compliance efforts and litigation avoidance in the coming years, and employers should prepare to review and likely revise existing employment contracts, confidentiality agreements, separation/severance agreements, and arbitration agreements. We at Michael Best will continue to monitor and report on any new developments and stand ready to assist employers in navigating this evolving area of law.