Michelle M. Cain

Michelle M. Cain Partner

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Recently-Passed Illinois Employment Laws Put Employers On Alert Of New Obligations

The Illinois legislature has recently sent to Governor Pritzker for signature a spate of employment legislation that could seriously impact employers, employees and job applicants.  Like other state legislatures responding to the #MeToo movement, Illinois’ new laws address sexual harassment, discrimination, and transparency.  The governor is expected to sign the legislation.

The Workplace Transparency Act

Senate Bill 75 creates the Workplace Transparency Act (WTA) to address “unlawful discrimination and harassment in the workplace.”  The WTA limits certain forms of confidentiality, non-disparagement and arbitration clauses in non-union employment contracts and policies. It does not apply to contracts subject to the Illinois Public Labor Relations Act or the National Labor Relations Act.

The WTA prohibits contracts and other documents from preventing or restricting an employee from reporting allegations of unlawful conduct to federal, state or local officials for investigation. “Unlawful conduct” includes not only criminal conduct but “unlawful employment practices,” including anti-discrimination, anti-harassment and anti-retaliation provisions of state and federal laws.

The WTA prohibits unilateral employment contracts that must be agreed to as a condition of employment from preventing an employee or prospective employee from “making truthful statements or disclosures about alleged unlawful employment practices.”  Additionally, it provides that unilateral agreements waiving or requiring arbitration of discrimination or harassment claims are unenforceable if they deny employees or prospective employees “a substantial or procedural right or remedy related to the alleged unlawful employment practices.”

If, however, a confidentiality, arbitration or waiver clause is mutually agreed-upon rather than unilateral, it may be enforceable if it is in writing, demonstrates bargained-for consideration by both parties, and acknowledges the right of the employee to: (1) report any good faith allegation of unlawful employment practices or criminal conduct to federal, state, or local authorities; (2) participate in proceedings of agencies enforcing discrimination laws; (3) make statements or disclosures required by law; and (4) request confidential legal advice.

The WTA permits employers and employees to enter into settlement or termination agreements that include confidentiality provisions if certain conditions are met.  Those conditions are similar to those necessary under the federal Older Worker Benefits Protection Act, and include: (1) documentation that confidentiality is the preference of the employee and is mutually beneficial to both parties; (2) notice to the employee in writing of his or her right to have an attorney review the agreement before execution; (3) valid, bargained-for consideration in exchange for confidentiality; (4) no waiver of unlawful claims accruing after the date of the execution of the agreement; (5) the employee is given a period of 21 calendar days to consider the agreement before execution; and (6) the employee is given seven days following execution to revoke the agreement, and the agreement is not effective until the revocation period has expired.  The statute also prohibits the employer from unilaterally including any clause that prohibits the employee from making truthful statements or disclosures regarding unlawful employment practices.

Under the WTA, employers are permitted to require the following individuals maintain confidentiality of allegations of unlawful employment practices: (1) an employee who receives complaints or investigates allegations related to unlawful employment practices as part of their assigned job duties; (2) an employee or third party who is notified of and requested to participate in an investigation into alleged unlawful employment practices and requested to maintain reasonable confidentiality during the investigation; (3) an employee or third party who receives attorney work product or attorney-client communications as part of a legal claim; (4)  an individual who is subject to a legal or evidentiary privilege; or (5) a third party who is hired by the employer to investigate complaints of unlawful employment practices.

If signed by the governor, the WTA will be effective on January 1, 2020.

Equal Pay Act Amendments

The Illinois legislature has also passed amendments to the state’s Equal Pay Act.  Under the new amendments, employers are prohibited from screening job applicants based on salary histories and from requiring prospective employees to provide salary history as a condition of consideration for employment.  Employers are also banned from requiring employees to sign an agreement or waiver that would prohibit the employee from discussing compensation information, with the exception of Human Resources personnel or supervisors whose job duties allow access to such information.  Employers may communicate with prospective employees about their expectations about wages, salaries and benefits.  The law does not apply to current employees applying for promotion or transfers.

The amendments also alter the standards for determining pay differentials between employees.  The amendment changes the requirement that pay must be equal for jobs that require “equal” skill and effort, to one that requires a comparison of jobs that require “substantially similar” skill, effort and responsibility.  Employers who pay employees different rates for “substantially similar” work may be required to demonstrate that the reason for the difference is job-related, consistent with a business necessity, and that those reasons account for the pay differential.

The amendments also provide for actions for enforcement in state court, with relief including special damages up to $10,000, injunctive relief, uncapped compensatory damages, punitive damages, and attorneys’ fees.

The amendments to the Equal Pay Act go into effect 60 days after the governor signs the bill.

Illinois Human Rights Act Amendments

Prior to the recently-passed amendments to the Illinois Human Rights Act, the statute defined “employer” similar to Title VII’s definition, as a person or entity employing fifteen (15) or more workers.  Recent amendments passed by the legislature have lowered the threshold to one (1) employee working in Illinois during twenty (20) or more calendar weeks in the current year or preceding the alleged violation.  This change would be effective July 1, 2020.

Additionally, the amendments to the Human Rights Act expand coverage to all “actual” or “perceived” protected classes.  “Harassment” is also defined more broadly than Title VII under the amendments, as 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 effect of substantially interfering with the individual’s work performance or creating an intimidating, hostile or offensive working environment.”

The amendments to the Human Rights Act also require employers to conduct annual sexual harassment training for all employees, using training materials developed by the Illinois Department of Human Rights (IDHR).  Employers must also report all adverse judgments or rulings relating to discrimination or harassment to the IDHR beginning on July 1, 2020 and by each July 1 thereafter.  The IDHR may request that an employer disclose information about settlements of discrimination and harassment claims.  Penalties for failure to provide sexual harassment training or to disclose required information to the IDHR include fines beginning at $500 for the first offense up to $3,000 for the third and subsequent offenses.

Hotel and Casino Employee Safety Act

Senate Bill 75 also creates the Hotel and Casino Employee Safety Act, intended to protect hotel and casino workers from sexual assault. Hotel and casino employers are required to implement a written anti-sexual harassment policy which does the following:

  • Encourages employees to report any instance of alleged sexual assault or sexual harassment by a guest to the employer immediately;
  • Describes the procedures that the employee shall follow in reporting sexual assault or sexual harassment by a guest;
  • Instructs the complaining employee to cease work until hotel or casino security personnel or police arrive to provide assistance;
  • Offers temporary work assignments to the complaining employee during the duration of the offending guest’s stay at the hotel or casino;
  • Provides the complaining employee with paid time off to file a police report and testify in any legal proceeding;
  • Informs the employee that the IHRA and Title VII provide additional protections against sexual harassment; and
  • Informs the employee that retaliation is prohibited.

The policy must be posted in conspicuous places in the hotel or casino and must be provided to employees in both English and Spanish.

The statute also requires employers to equip employees who are assigned to work in guest rooms, restrooms, or casino floors where no other employee is present with a safety or notification device in order to summon help if the employee reasonably believes that an ongoing crime, sexual harassment, sexual assault or other emergency is occurring.

Employees who believe the statute has been violated must provide written notice to the employer; the employer then has fifteen (15) days to remedy the alleged violation.  If the violation is not remedied, the employee may file a lawsuit in state court and, if the violation is proven, is entitled to damages up to $350 per violation, as well as attorneys’ fees and costs.

If signed, the Hotel and Casino Employee Safety Act goes into effect on July 1, 2020.

Practical Application

Illinois employers should use the time prior to the effective dates of the legislation to familiarize themselves with the new requirements of Illinois law.  Prior to the effective dates, employers should review existing sexual harassment and discrimination policies, job application procedures, and their employment, non-compete, arbitration, non-solicitation and confidentiality agreements and revise them as necessary to comply with the provisions of the new legislation.  They should also prepare for annual sexual harassment training for all employees.  After the effective dates of the statutes in 2020, employers should ensure that their hiring practice comply with the law, and that their separation, severance and settlement agreements contain the elements necessary to ensure that they are enforceable.

The St. Louis employment attorneys at McMahon Berger have been representing employers across the country in labor and employment matters for over sixty years, and are available to discuss these issues and others. As always, the foregoing is for informational purposes only and does not constitute legal advice regarding any particular situation as every situation must be evaluated on its own facts. The choice of a lawyer is an important decision and should not be based solely on advertisements.

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