August 26, 2019

It will come as little surprise to employers that state legislatures have been enacting changes in response to recent high-profile sexual harassment cases. What may come as a surprise, however, is the number of other changes likely coming to Illinois employment law very soon.

The new changes come via Senate Bill 75 (the Bill), which was approved by Governor J.B. Pritzker earlier this month. The Bill will usher in significant changes to the legal landscape for Illinois employers – and leaves little time to prepare.

Workplace Transparency Act
Among the changes brought by the Bill is the new Workplace Transparency Act, which imposes new restrictions on how and when employers can use confidentiality and arbitration provisions in agreements with employees.

The proposed law provides different standards of enforceability for provisions that are "unilateral" and "mutual." Unilateral provisions are those that are presented to employees (or prospective employees) as a condition of employment under "take it or leave it" scenarios. Mutual provisions are those that are bargained for between the parties. As to arbitration provisions, the proposed law states that unilateral arbitration provisions are void if they have the purpose or effect of denying employees a "substantive or procedural right or remedy" otherwise available to them.

The most attention-grabbing provision of the proposed law may be the new limitations on enforceability of confidentiality requirements in settlement and separation agreements. Under the law, such confidentiality provisions are enforceable if they meet a set of criteria, nearly all of which echo the requirements of the Older Workers Benefit Protection Act (OWBPA) for obtaining a release of age-based claims:

  1. Confidentiality must be the "documented preference" of the employee (or prospective employee) and "mutually beneficial" to both the employer and employee.
  2. The agreement must contain a notice to the employee of his or her right to receive legal advice before signing.
  3. There must be consideration for the confidentiality provision.
  4. The agreement cannot release claims arising after the date of execution.
  5. The employee receives up to 21 days to consider the agreement.
  6. The employee is given seven days to revoke acceptance of the agreement, although this seven-day period can be "knowingly and voluntarily" waived, unlike under the OWBPA.

An Expanded Illinois Human Rights Act
Besides creating new law, the Bill also expands existing law with significant changes to the Illinois Human Rights Act (IHRA). Perhaps in response to recent high-profile cases involving sexual harassment outside of the workplace, the amended IHRA now expressly states that a hostile "working environment" for purposes of sexual harassment is not limited to the physical space where an employee is assigned to work. The amended IHRA also expressly states that harassment based on all other characteristics protected by the IHRA is prohibited, and as with sexual harassment, a hostile working environment is not limited just to the employee's workplace.

In addition to these extended protections, the amended IHRA contains new provisions expanding the IHRA's scope to reach independent contractors and consultants, as well as discrimination based on an employee's "actual or perceived" protected characteristic.

One of the more lasting effects of the amendments may come from expanded employer liability for harassment. As most employers know, the Illinois Supreme Court held in its 2009 decision Sangamon County Sherriff's Department v. Illinois Human Rights Commission that employers are strictly liable for sexual harassment by supervisors. The decision hinged on the IHRA's language that "an employer shall be responsible for the sexual harassment of the employer's employee by nonemployees or nonmanagerial employees only if the employer becomes aware of the conduct and fails to take remedial measures." The court reasoned that based on this language, when the offending employee is a managerial employee, the employer is liable for the conduct regardless of whether it knew about the conduct.

Notably, the amended IHRA adopts nearly this same language with respect to employer liability for harassment based on all of the protected characteristics covered by the IHRA. (The only difference is that where the sexual harassment provision states that employers "shall be responsible," the language for other types of harassment states that an employer "is responsible" – a distinction likely without a difference.) Although it may take a few years for courts to rule on the application of the Sangamon County to the amended IHRA, employers should brace for expanded liability based on supervisor conduct that constitutes harassment based on race, age, religion, sexual orientation, and all other characteristics covered by the IHRA. Proper training, policies, and procedures will become even more important than they already are.

Reporting for Duty
Beyond expanding the scope of the IHRA, the amendments impose new reporting requirements on employers. Beginning on July 1, 2020, and before each July 1 thereafter, all employers must report to the Illinois Department of Human Rights (IDHR) the total of final, adverse judgments and administrative rulings against them for any unlawful employment practice, whether any equitable relief was awarded as part of the judgment or ruling, and a breakdown of the protected characteristics involved in the judgment or ruling.

The IDHR will have new power to request settlement information from employers when investing a charge of discrimination filed by an employee. The IDHR will have the authority to force the employers to report on all settlement agreements entered into during the preceding five years, where such agreements were in settlement of allegations of "sexual harassment or unlawful discrimination" involving either conduct in the workplace or the behavior of employees or "corporate executives" outside the workplace. The IDHR will annually publish aggregate data on the information it receives, but the amendments prohibit the IDHR from using the disclosed information in making a finding of substantial evidence against an employer in relation to a charge.

Intermission
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Welcome back. Let's continue.

Training Day
The amended IHRA also includes new sexual harassment training requirements that apply to all employers with employees working in the state – not just Illinois-based employers. Under the new requirements, employers must provide all of their Illinois employees with sexual harassment training at least once per year. The training will need to meet minimum criteria to be announced by the IDHR. The IDHR will develop and publish a "model" training program, which employers may then use on its own or as the basis for their own trainings.

Employers that operate restaurants and bars have additional requirements. Under the amendments, restaurants and bars must provide new employees with a written sexual harassment policy within the first week of employment. The written policy must include, among other items, how to report sexual harassment internally, an explanation of the internal complaint process, and how to report the alleged harassment to the IDHR and Equal Employment Opportunity Commission (EEOC). The policies must be available in both English and Spanish. Restaurants and bars also must provide annual training on sexual harassment to all employees that contains elements beyond the required sexual harassment training for non-restaurants and bars. The IDHR plans to create and publish this additional model training program as well.

The penalties for non-compliance can be steep. Fines for first violations will be up to $1,000, second violations up to $3,000, and all subsequent violations up to $5,000.

What Now?
These are just the highlights of the changes coming to Illinois employment law under the Bill, but at this point, you likely have one question on your mind: When do these go into effect?

January 1, 2020. It's a lot of changes in a short amount of time, and employers should get ahead of things now by contacting their employment counsel to discuss how the changes will affect their businesses, to review their policies and bring them into compliance, and to start discussing their harassment policies and training. Preparing now can help ensure that the new year doesn't bring new headaches and liability.

This article contains material of general interest and should not be construed as legal advice or a legal opinion on any specific facts or circumstances. Under applicable rules of professional conduct, this content may be regarded as attorney advertising.