On August 15, 2025, Governor J.B. Pritzker signed House Bill 3638 into law amending the Illinois Workplace Transparency Act (IWTA). These amendments, which take effect June 1, 2026, expand employee protections by broadening definitions, tightening restrictions on certain contractual provisions, and altering available remedies for employees bringing actions against employers for violations of the IWTA.
Overview of the IWTA
Originally enacted in 2019, the IWTA protects employees who truthfully report an alleged "unlawful employment practice" (i.e., discrimination and harassment) in the workplace by limiting employers' ability to use broad non-disclosure and non-disparagement provisions in employment, separation, and settlement agreements. The law aims to ensure that employees can speak out by prohibiting unilateral contract terms that would otherwise prevent them from reporting or pursuing claims under Illinois law.
Expanded Definition of "Unlawful Employment Practice" and Introduction of New "Concerted Activity" Protections
The amendments to the IWTA expand the scope of what may constitute an "unlawful employment practice," now encompassing a wider range of workplace topics such as wage and hour violations, safety concerns, and other regulatory matters, in addition to harassment and discrimination. In practical terms, this broadened definition means that employers may no longer include confidentiality provisions that attempt to restrict truthful disclosure by employees around these additional topics, as such a provision would be deemed void and against public policy.
The amendments also make clear that employers cannot include contract language that prevents employees from engaging in "concerted activity" to address work-related issues. "Concerted activity" is defined expansively and includes any activity for the purpose of collective bargaining or other mutual aid or protection, like when employees work together to bring up concerns regarding workplace conditions, discussion of wages, or safety concerns.
Simply put: Contractual provisions that restrict employee speech on a broader array of topics or discourage certain collective actions are deemed void under these amendments.
Restrictions on "Unilateral" Conditions in Agreements
The amended IWTA also restricts employer use of new categories of contractual provisions if imposed unilaterally by the employer as a condition of employment or continued employment, including provisions that:
- shorten the applicable statute of limitation;
- apply non-Illinois law to an Illinois employee's claim; or
- require a venue outside of Illinois to adjudicate an Illinois employee's claim.
Note that the amended IWTA still permits certain agreements, clauses, covenants, or waivers that would otherwise be prohibited, provided they are in writing, demonstrate actual, knowing, and bargained-for consideration, and acknowledge the right of the employee to engage in protected activity. These protected activities now include participating in proceedings related to unlawful employment practices and engaging in concerted activity to address work-related issues.
Confidentiality Provisions in Settlement and Termination Agreements
To be sure, the amended IWTA continues to permit employers as well as current, prospective and former employees to enter into settlement or termination agreements that include promises of confidentiality related to alleged unlawful employment practices. However, there are a few notable conditions imposed on such provisions, including that:
- confidentiality provisions may not prohibit future or prospective concerted activity related to workplace conditions;
- confidentiality provisions must be supported by separate consideration apart from that provided for a release of claims; and
- an employer may not unilaterally state that promises of confidentiality are the preference of the employee (in other words, it must actually be the preference of the employee).
Adjustments to Available Damages
The amended IWTA's damages provision expands the remedies available to employees who establish a violation of the IWTA to include consequential damages in addition to reasonable attorneys' fees and costs.
Next Steps for Employers
Employers operating in Illinois should review with counsel their existing employment, separation, and settlement agreement templates, in addition to related policies, to ensure compliance with the amended IWTA in advance of the June 1, 2026, effective date.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
