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Illinois General Assembly· HB 3638Governor Approved

WORK TRANSPARENCY-CONFIDENTIAL, the official text

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HB3638 Enrolled                      LRB104 12137 SPS 22236 b

1   AN ACT concerning employment.

2   Be it enacted by the People of the State of Illinois,

3 represented in the General Assembly:

4   Section 5. The Workplace Transparency Act is amended by

5 changing Sections 1-5, 1-10, 1-15, 1-20, 1-25, 1-30, 1-35, and

6 1-40 as follows:

7   (820 ILCS 96/1-5)

8   Sec. 1-5. Purpose. This State has a compelling and

9 substantial interest in securing individuals' freedom from

10 unlawful discrimination and harassment in the workplace. This

11 State also recognizes the right of parties to freely contract

12 over the terms, privileges and conditions of employment as

13 they so choose. The purpose of this Act is to ensure that all

14 parties to a contract for the performance of services

15 understand and agree to the mutual promises and consideration

16 therein, and to protect the interest of this State in ensuring

17 all workplaces are free of unlawful discrimination, and

18 harassment, and violations of State or federal employment

19 laws.

20 (Source: P.A. 101-221, eff. 1-1-20.)

21  (820 ILCS 96/1-10)

22  Sec. 1-10. Application.
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1   (a) This Act does not apply to any collective bargaining

2 agreements contracts that are entered into in and subject to

3 the Illinois Public Labor Relations Act or the National Labor

4 Relations Act. If there is a conflict between any valid and

5 enforceable collective bargaining agreement and this Act, the

6 collective bargaining agreement controls.

7   (b) This Act shall have no effect on the determination of

8 whether an employment relationship exists for the purposes of

9 other State or federal laws, including, but not limited to,

10 the Illinois Human Rights Act, the Workers' Compensation Act,

11 the Unemployment Insurance Act, and the Illinois Wage Payment

12 and Collection Act.

13  (c) This Act applies to contracts entered into, modified,

14 or extended on or after the effective date of this Act.

15 (Source: P.A. 101-221, eff. 1-1-20.)

16  (820 ILCS 96/1-15)

17  Sec. 1-15. Definitions. As used in this Act:

18  "Concerted activity" means activities engaged in for the

19 purpose of collective bargaining or other mutual aid or

20 protection as provided in 29 U.S.C. 157 et seq., as it existed

21 on January 19, 2025, and the Illinois Education Labor

22 Relations Act, Illinois Public Labor Relations Act, and Labor

23 Dispute Act.

24  "Employee" has the same meaning as set forth in Section

25 2-101 of the Illinois Human Rights Act. "Employee" includes
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1 "nonemployees" as defined in Section 2-102 of the Illinois

2 Human Rights Act.

3   "Employer" has the same meaning as set forth in Section

4 2-101 of the Illinois Human Rights Act.

5   "Mutual condition of employment or continued employment"

6 means any contract, agreement, clause, covenant, or waiver

7 negotiated between an employer and an employee or prospective

8 employee in good faith for consideration in order to obtain or

9 retain employment.

10  "Prospective employee" means a person seeking to enter an

11 employment contract with an employer.

12  "Settlement agreement" means an agreement, contract, or

13 clause within an agreement or contract entered into between an

14 employee, prospective employee, or former employee and an

15 employer to resolve a dispute or legal claim between the

16 parties that arose or accrued before the settlement agreement

17 was executed.

18  "Termination agreement" means a contract or agreement

19 between an employee and an employer terminating the employment

20 relationship.

21  "Unlawful employment practice" means any practice made

22 unlawful that is form of unlawful discrimination, harassment,

23 or retaliation that is actionable under Article 2 of the

24 Illinois Human Rights Act, Title VII of the Civil Rights Act of

25 1964, or any other related State or federal rule or law

26 governing employment, including those that are is enforced by
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1 the Illinois Department of Human Rights, Illinois Department

2 of Labor, Illinois Labor Relations Board, or the Equal

3 Employment Opportunity Commission, United States Department of

4 Labor, Occupational Safety and Health Administration, or

5 National Labor Relations Board.

6   "Unilateral condition of employment or continued

7 employment" means any contract, agreement, clause, covenant,

8 or waiver an employer requires an employee or prospective

9 employee to accept as a non-negotiable material term in order

10 to obtain or retain employment.

11 (Source: P.A. 101-221, eff. 1-1-20.)

12  (820 ILCS 96/1-20)

13  Sec. 1-20. Reporting of allegations. No contract,

14 agreement, clause, covenant, waiver, or other document shall

15 prohibit, prevent, or otherwise restrict an employee,

16 prospective employee, or former employee from (1) reporting

17 any allegations of unlawful conduct to federal, State, or

18 local officials for investigation, including, but not limited

19 to, alleged criminal conduct or unlawful employment practices,

20 or (2) engaging in concerted activity to address work-related

21 issues.

22 (Source: P.A. 101-221, eff. 1-1-20.)

23  (820 ILCS 96/1-25)

24  Sec. 1-25. Conditions of employment or continued
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1 employment.

2   (a) Any agreement, clause, covenant, or waiver that is a

3 unilateral condition of employment or continued employment and

4 has the purpose or effect of preventing an employee or

5 prospective employee from making truthful statements or

6 disclosures about alleged unlawful employment practices or

7 engaging in protected concerted activity to address

8 work-related issues is against public policy, void to the

9 extent it prevents such statements or disclosures, and

10 severable from an otherwise valid and enforceable contract

11 under this Act.

12  (b) Any agreement, clause, covenant, or waiver that is a

13 unilateral condition of employment or continued employment and

14 requires the employee or prospective employee to waive,

15 arbitrate, or otherwise diminish any existing or future claim,

16 right, or benefit related to an unlawful employment practice

17 to which the employee or prospective employee would otherwise

18 be entitled under any provision of State or federal law,

19 including that which purports to shorten the applicable

20 statute of limitation, apply non-Illinois law to an Illinois

21 employee's claim, or require a venue outside of Illinois to

22 adjudicate an Illinois employee's claim, is against public

23 policy, void to the extent it denies an employee or

24 prospective employee a substantive or procedural right or

25 remedy related to alleged unlawful employment practices, and

26 severable from an otherwise valid and enforceable contract
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1 under this Act.

2       (c) Any agreement, clause, covenant, or waiver that is a

3 mutual condition of employment or continued employment may

4 include provisions that would otherwise be against public

5 policy as a unilateral condition of employment or continued

6 employment, but only if the agreement, clause, covenant, or

7 waiver is in writing, demonstrates actual, knowing, and

8 bargained-for consideration from both parties, and

9 acknowledges the right of the employee or prospective employee

10 to:

11      (1) report any good faith allegation of unlawful

12      employment practices to any appropriate federal, State, or

13      local government agency enforcing discrimination laws;

14      (2) report any good faith allegation of criminal

15      conduct to any appropriate federal, State, or local

16      official;

17      (3) participate in a proceeding related to unlawful

18      employment practices, including any litigation brought by

19      any federal, State, or local government agency or any

20      other person who alleges that the employer has violated

21      any State, federal, or local law, regulation, or rule with

22      any appropriate federal, State, or local government agency

23      enforcing discrimination laws;

24      (4) make any truthful statements or disclosures

25      required by law, regulation, or legal process; and

26      (5) request or receive confidential legal advice; and
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1   .

2      (6) engage in concerted activity to address

3   work-related issues.

4   (d) Failure to comply with the provisions of subsection

5 (c) shall establish a rebuttable presumption that the

6 agreement, clause, covenant, or waiver is a unilateral

7 condition of employment or continued employment that is

8 governed by subsection (a) or (b).

9   (e) Nothing in this Section shall be construed to prevent

10 an employee or prospective employee and an employer from

11 negotiating and bargaining over the terms, privileges, and

12 conditions of employment.

13 (Source: P.A. 101-221, eff. 1-1-20; 102-558, eff. 8-20-21.)

14  (820 ILCS 96/1-30)

15  Sec. 1-30. Settlement or termination agreements.

16  (a) An employee, prospective employee, or former employee

17 and an employer may enter into a valid and enforceable

18 settlement or termination agreement that includes promises of

19 confidentiality related to alleged unlawful employment

20 practices, other than future or prospective concerted activity

21 related to workplace conditions, so long as:

22     (1) confidentiality is the documented preference of

23  the employee, prospective employee, or former employee and

24  is mutually beneficial to both parties;

25     (2) the employer notifies the employee, prospective
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1   employee, or former employee, in writing, of his or her

2   right to have an attorney or representative of his or her

3   choice review the settlement or termination agreement

4   before it is executed;

5   (3) there is valid, bargained for consideration in

6   exchange for the confidentiality separate from any

7   consideration that is provided in exchange for a release

8   of claims;

9   (4) the settlement or termination agreement does not

10  waive any claims of unlawful employment practices that

11  accrue after the date of execution of the settlement or

12  termination agreement;

13  (5) the settlement or termination agreement is

14  provided, in writing, to the parties to the prospective

15  agreement and the employee, prospective employee, or

16  former employee is given a period of 21 calendar days to

17  consider the agreement before execution, during which the

18  employee, prospective employee, or former employee may

19  sign the agreement at any time, knowingly and voluntarily

20  waiving any further time for consideration; and

21  (6) unless knowingly and voluntarily waived by the

22  employee, prospective employee, or former employee, he or

23  she has 7 calendar days following the execution of the

24  agreement to revoke the agreement and the agreement is not

25  effective or enforceable until the revocation period has

26  expired.
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1   (b) An employer may not unilaterally include any clause in

2 a settlement or termination agreement that prohibits the

3 employee, prospective employee, or former employee from making

4 truthful statements or disclosures regarding unlawful

5 employment practices or unilaterally include any clause in a

6 settlement or termination agreement that states that the

7 promises of confidentiality are the preference of the

8 employee.

9   (c) Failure to comply with the provisions of this Section

10 shall render any promise of confidentiality related to alleged

11 unlawful employment practices against public policy void and

12 severable from an otherwise valid and enforceable agreement.

13  (d) Nothing in this Section shall be construed to prevent

14 a mutually agreed upon settlement or termination agreement

15 from waiving or releasing the employee, prospective employee,

16 or former employee's right to seek or obtain any remedies or

17 relief of any kind relating to an unlawful employment practice

18 claim that occurred before the date on which the agreement is

19 executed.

20 (Source: P.A. 101-221, eff. 1-1-20.)

21  (820 ILCS 96/1-35)

22  Sec. 1-35. Consequential damages, costs, Costs and

23 attorney's fees. An employee, prospective employee, or former

24 employee shall be entitled to consequential damages, in

25 addition to reasonable attorney's fees and costs incurred in
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1 challenging a contract for violation of this Act upon a final,
2 non-appealable action in favor of the employee, prospective
3 employee, or former employee on the question of the validity
4 and enforceability of the contract or defending an action for
5 breach of a confidentiality agreement pursuant to this Act.
6 (Source: P.A. 101-221, eff. 1-1-20.)

7  (820 ILCS 96/1-40)

8  Sec. 1-40. Right to testify. Notwithstanding any other

9 law to the contrary, any agreement, clause, covenant, or

10 waiver, settlement agreement, or termination agreement that

11 waives the right of an employee, prospective employee, or

12 former employee to testify in an administrative, legislative,

13 arbitral, or judicial proceeding, including a deposition taken

14 in connection with any of the proceedings, concerning alleged

15 criminal conduct or alleged unlawful employment practices on

16 the part of the other party to the employment contract,

17 settlement agreement, or termination agreement, or on the part

18 of the party's agents or employees, when the employee,

19 prospective employee, or former employee has been required or

20 requested to attend the proceeding pursuant to a court order,

21 subpoena, or written request from an administrative agency or

22 the legislature, is void and unenforceable under the public

23 policy of this State. This Section is declarative of existing

24 law.

25 (Source: P.A. 101-221, eff. 1-1-20.)
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