On January 1, 2026, Public Act 104-0320 will take effect in Illinois, amending the Workplace Transparency Act (“Act”). The Act has been in effect since 2020 and regulates certain terms and conditions in employment, severance, and settlement agreements. The amendments are meant to bolster the protection of employees. In this article, we will cover key aspects of the amendments.
New Definitions
The Act adds a new definition, which is “concerted activity.” This is meant to incorporate how the term is used under 29 U.S.C. 157 of the National Labor Relations Act (“NLRA”) and under Illinois statutes. “Concerted activity” will cover rights to collectively bargain and discuss work-related conditions, such as wages and safety.
The Act also changes the definition of “unlawful employment practice” to now mean any practice unlawful under state or federal law that governs employment, including those enforced by the Illinois Department of Labor, U.S. Department of Labor, and the National Labor Relations Board.
The Act will prohibit contracts or agreements that restrict employees, prospective employees, and former employees from engaging in “protected activity.”
Employment Terms and Conditions
Another interesting change in the Act is that it now prohibits the following terms and conditions that may be contained in unilateral conditions of employment:
- Clauses that shorten the applicable limitations period;
- Clauses that apply non-Illinois law to an employee’s claim; or
- Clauses that require venue outside of Illinois to adjudicate an employee’s claim.
The above prohibitions are still allowed if they are mutual conditions of employment as defined in the Act.
Settlement Agreements
The amendments clarify that confidentiality related to an unlawful employment practice is still valid but does not apply to future or prospective concerted activity relating to workplace conditions.
The amendments also now require separate consideration for a release of claims and the promise of confidentiality. This means that the consideration must be separately stated in an agreement.
Additionally, an employer cannot unilaterally include a term in a settlement agreement that states that the promise of confidentiality is the preference of an employee.
Remedies
The amendments now add consequential damages as an express remedy. Such damages can be recovered by the employee in challenging a contract in violation of the Act if the employee is successful in the litigation. The amendments now allow the employee to recover such damages in defending against a claim of breach of confidentiality.
Impact
These amendments will apply to covered agreements entered into after January 1, 2026. Employers who use offer letters as employment agreements must be mindful of these amendments, as such offer letters could be considered “unilateral conditions of employment.” Before next year, employers should review their offer letters and employment agreements to make sure they comply with the Act. Severance and settlement agreements also need to be reviewed and updated to ensure that separate consideration is provided for confidentiality. An employer’s approach to settlement is also impacted. Providing a terminated employee with a “take-it-or-leave-it” severance agreement may run afoul of the Act if certain terms are not bargained for between the parties.