Now is the time for employers in Illinois to review agreements they use for employment and the separation of employees. Effective January 1, 2026, amendments to the Workplace Transparency Act will require new conditions. See P.A. 104-320, which amends the Act found at 820 ILCS 96, et.seq.
To begin, the new provisions do not apply to collective bargaining agreements. Those CBAs govern the Act.
Employees, former employees, and job applicants are protected and may not be unilaterally required to waive reporting allegations of unlawful conduct to officials or waive engaging in concerted activity related to work.
Further, employment agreements may not unilaterally shorten limitation periods, require application of non-Illinois law to an Illinois employee’s claim, or require a venue outside of Illinois to adjudicate an Illinois employee’s claim. This provision will impact out-of-state employers whose employment agreements require choice of law or forum selection outside of Illinois.
Employees may waive protections only in writing and which result from actual, knowing, and bargained-for consideration from both parties, but must recognize certain rights that are preserved, such as reporting good faith allegations of unlawful conduct, cooperating, or participating in related proceedings, obtaining legal advice, and engaging in concerted activities.
With respect to termination agreements, confidentiality provisions are still permitted; however, such provisions may not restrict future concerted activities related to workplace conditions and confidentiality must be the employee’s documented preference, the result of bargained-for consideration, and confidentiality provisions must provide for a 21 day consideration period and 7 day revocation period, much like the Age Discrimination in Employment Act and Older Workers Benefit Protection Act. Those periods may be waived knowingly and voluntarily.
Another expansion of the Act includes remedies for compensatory and consequential damages, costs, and attorneys’ fees if the employee wins a challenge to an agreement covered by the Act.
The Employment and Labor Law Team of Sandberg Phoenix stands ready to assist employers in reviewing and updating employment, severance, and settlement agreements, as well as advising human resource professionals regarding the implementation of these new requirements.
