The Bottom Line
- On January 1, 2026, amendments to the Illinois Workplace Transparency Act (IWTA) will go into effect. These amendments will impact the terms of agreements provided to Illinois employees.
- In light of this development, employers of Illinois employees should review and, if necessary, revise employment, restrictive covenant, arbitration, separation and/or settlement agreements to comply with the new requirements.
On January 1, 2026, a bill signed into law by Illinois Governor JB Pritzker amending the Illinois Workplace Transparency Act (IWTA) will go into effect. The amendments broaden several employee protections and will impact the required disclosures and terms of agreements that are given by employers to Illinois employees.
Existing Law
Originally enacted in 2019, the IWTA prohibits Illinois employers from including language in certain employment-related agreements that may restrict an employee’s ability to make truthful statements or disclosures regarding alleged “unlawful employment practices,” which have been defined to mean unlawful discrimination, harassment or retaliation, unless certain conditions are met. The purpose of the law is to preclude employers from imposing unilateral contract provisions on employees that would otherwise prevent them from speaking out or pursuing claims with respect to such unlawful employment practices.
Overview of the Amendments
Expanded Definition of “Unlawful Employment Practice”
The amendments expand the definition of “unlawful employment practice” to include any unlawful practice under a state or federal law governing employment, including but not limited to those enforced by the U.S. Department of Labor, National Labor Relations Board, the Occupational Health and Safety Administration, and corresponding state agencies. Therefore, the term now encompasses a wider array of workplace issues such as wage and hour violations, safety concerns, and labor disputes – not just discrimination, harassment and retaliation.
Protections for Concerted Activity
Under the amended IWTA, contractual agreements that prohibit, prevent or otherwise restrict current, prospective or former employees from engaging in concerted activity to address work-related issues will be unlawful. “Concerted activity” is defined to mean “activities engaged in for the purpose of collective bargaining or other mutual aid or protection,” as provided by the National Labor Relations Act on January 19, 2025 (i.e., prior to the Trump administration taking office) and various Illinois labor relations laws.
Additional Restrictions on “Unilateral” Contractual Conditions
Under the amendments, employers are prohibited from including in any agreement with employees any unilateral (i.e., non-negotiable) condition of employment or continued employment that prevents an employee or prospective employee from making truthful statements about “unlawful employment practices,” as that term has been redefined.
Additionally, employers will be prohibited from requiring any unilateral contractual conditions of employment or continued employment that:
- shorten the applicable statute of limitations;
- apply non-Illinois law to an Illinois employee’s claim; or
- require a venue outside of Illinois to adjudicate an Illinois employee’s claim.
However, these otherwise prohibited contractual conditions are still permitted under the amended IWTA if they are “mutual” conditions of employment or continued employment. Requirements that must be met to establish “mutuality” include that the condition is in writing, demonstrates actual, bargained-for consideration from both parties, and acknowledges certain rights of the employee or prospective employee. In addition, under the amendments, the employee rights that must be acknowledged will now include the right to participate in certain legal proceedings related to unlawful employment practices and the right to engage in concerted activity to address work-related issues, among other items.
Additional Restrictions on Settlement and Termination Agreements
The amended IWTA continues to allow employers to enter into settlement and termination agreements with current, prospective and former employees that include promises of confidentiality related to alleged unlawful employment practices, as long as such provisions are the documented preference of the employee, among other conditions. However, under the amendments, these other conditions will now also include the following:
- the confidentiality provisions may not restrict future or prospective concerted activity related to workplace conditions;
- the confidentiality provisions must be supported by consideration separate from any consideration that is provided in exchange for a release of claims; and
- an employer may not unilaterally include language in a settlement or termination agreement that states that any promises of confidentiality in the agreement are the preference of the employee.
Expanded Rights for Employees to Testify
The amendments expand the rights of current, prospective and former employees to testify not only in administrative, legislative and judicial proceedings concerning alleged criminal conduct or unlawful employment practices, but also to testify in depositions taken in connection with such proceedings, as well as in arbitration proceedings.
Expansion of Available Damages
Under the amended IWTA, the damages available to a current, former or prospective employee who establishes an IWTA violation will now include consequential damages, in addition to reasonable attorneys’ fees and costs.