Illinois Amends the Workplace Transparency Act Effective January 1, 2026—Tips for Employers

Quick Hits

• Illinois has enacted significant amendments to the Workplace Transparency Act (WTA), effective January 1, 2026, which will impact employment, separation, and settlement agreements by broadening the definition of “unlawful employment practice” and adding protections for “concerted activity.”
• The amendments prohibit certain unilateral agreement terms, tighten confidentiality requirements in separation and settlement agreements, expand participation rights in legal proceedings, and increase available remedies.

What’s Changing

Broader definition of “unlawful employment practice.” Previously focused on discrimination, harassment, and retaliation, the WTA will now cover any practice unlawful under state or federal employment laws, including those enforced by the Illinois Department of Human Rights, Illinois Department of Labor, Illinois Labor Relations Board, U.S. Equal Employment Opportunity Commission, U.S. Department of Labor, Occupational Safety and Health Administration, and National Labor Relations Board. This expansion sweeps in wage and hour, safety, labor, and other employment claims.

Protection for “concerted activity.” Agreements may not prohibit or restrict employees, prospective employees, or former employees from engaging in concerted activities to address work-related issues (as defined by the National Labor Relations Act as of January 19, 2025, and certain Illinois labor statutes). “Concerted activity” includes acting together for mutual aid or protection, collective bargaining, union organizing, and discussing wages, hours, and working conditions.

Prohibited unilateral terms in conditions of employment. Any unilateral condition of employment or continued employment may not: (1) shorten an applicable statute of limitations, (2) apply non-Illinois law to an Illinois employee’s claim, (3) require a non-Illinois venue for an Illinois employee’s claim, or (4) state that confidentiality is the employee’s preference. Such terms are void to the extent they deprive employees of substantive or procedural rights or remedies concerning unlawful employment practices.

“Mutual” agreements remain permissible with updated acknowledgments. Provisions that would be impermissible as unilateral conditions may still be included as a “mutual condition of employment or continued employment” if in writing, supported by actual, knowing, bargained-for consideration, and if the agreement expressly acknowledges the individual’s rights to report unlawful employment practices and criminal conduct, participate in proceedings related to unlawful employment practices (including private litigation and arbitration), make truthful statements required by law, seek confidential legal advice, and engage in concerted activity to address workplace issues. The amendments broaden these acknowledgments beyond prior law.

Stricter rules for confidentiality in separation and settlement agreements. Where an agreement includes confidentiality regarding alleged unlawful employment practices, the promise of confidentiality must be supported by separate, bargained-for consideration that is distinct from consideration for a release of claims. Employers may not unilaterally state that confidentiality reflects the employee’s preference. Confidentiality provisions cannot restrict future or prospective concerted activity related to workplace conditions. Some commentary indicates confidentiality regarding alleged unlawful employment practices must expire within five years of the alleged conduct, so employers may want to consider this emerging interpretation in drafting.

Expanded right to participate in proceedings. The WTA clarifies that employees (including prospective and former employees) may participate in administrative, legislative, judicial, and arbitral proceedings concerning alleged unlawful employment practices or criminal conduct, including providing deposition testimony, when requested by court order, subpoena, or written request from an agency or the legislature.

New remedies. In addition to reasonable attorneys’ fees and costs, individuals may recover consequential damages for establishing a violation of the WTA or for successfully defending against an employer’s claim for breach of a confidentiality obligation under the WTA.

Effective date and scope. The amendments apply to agreements entered into, modified, or extended on or after January 1, 2026. Employers may want to align all templates and practices in advance of that date.

Practical Implications and Drafting Considerations

Reassessing scope and carve-outs in confidentiality/nondisparagement. Employers may want to expand carve-outs to expressly permit truthful statements and disclosures about any alleged unlawful employment practices, not only discrimination-related claims, and include clear acknowledgments of rights to report to agencies, to participate in any related proceedings (including arbitration and depositions), to make legally required disclosures, to seek confidential legal advice, and to engage in concerted activity.

Separate consideration for confidentiality in separation/settlement. Employers may want to allocate a distinct sum—or otherwise document separate bargained-for consideration—specifically for confidentiality related to alleged unlawful employment practices. Employers may want to ensure that settlements do not include unilateral statements that confidentiality is the employee’s preference, and they do not restrict future or prospective concerted activity regarding workplace conditions. Consider whether to set a confidentiality term limit consistent with emerging guidance referencing a five-year expiration for confidentiality regarding alleged unlawful employment practices.

Auditing unilateral agreement terms. Employers may want to remove or revise any unilateral provisions that (a) shorten statutes of limitations, (b) select non-Illinois law for Illinois claims, (c) require non-Illinois venues, or (d) declare confidentiality as the employee’s preference. Employers that preserve such terms in settlement agreements may want to restructure them as mutual conditions supported by bargained-for consideration and the required acknowledgments.

Concerted activity language. Employers may want to ensure no agreement language restricts concerted activity. Consider affirmative statements recognizing employees’ rights to engage in concerted activity to address workplace issues. Also consider aligning confidentiality and nondisparagement provisions accordingly.

Arbitration and participation rights. Employers may want to confirm that arbitration agreements do not impede employees’ rights to testify or participate in proceedings (including arbitrations) concerning alleged unlawful employment practices or criminal conduct when requested by subpoena, order, or agency/legislative request. Employers may also want to determine where acknowledgments should be udpated.

Updating timing safeguards in separation/settlement agreements. Consider maintaining the WTA’s existing procedural safeguards for confidentiality in separation/settlement agreements, including written agreements, voluntary preferences, notice of the right to consult counsel, and twenty-one-day review/seven-day revocation periods, and layering in the new separate consideration and concerted activity constraints.

Preparing for expanded remedies exposure. Employers may want to recalibrate risk assessments and approval protocols, given the WTA’s new consequential damages remedy and fee-shifting for violations and certain defenses. When recalibrating, consider ensuring matter management and template controls reflect this heightened exposure.

Action Plan for Employers

Comprehensive agreement audit. Employers that inventory and review all employment-related agreements that could be executed, modified, or extended on or after January 1, 2026, including offer letters, employment agreements, confidentiality/NDA agreements, restrictive covenant agreements, arbitration agreements, and all separation and settlement templates will be well-prepared when the new requirements take effect. Consider identifying and remediating unilateral terms that contravene the amendments and expand carve-outs and acknowledgments accordingly.

Redrafting separation/settlement confidentiality. Employers may want to create a separate consideration line item or clear allocation for confidentiality relating to alleged unlawful employment practices. Employers may also want to remove unilateral “employee preference” statements, ensure the clause does not restrict future or prospective concerted activity and consider a defined confidentiality term consistent with current guidance, and retain WTA-required review and revocation periods and attorney-review notices.

Standardization of “concerted activity” acknowledgments. Consider embedding an express acknowledgment of employees’ rights to engage in concerted activity in applicable agreements, alongside the updated acknowledgment of rights to report and participate in proceedings and depositions/arbitral processes.

Choice-of-law/venue/statute-of-limitations review. Employers may want to remove or restructure as mutual any provisions that shorten limitations periods, select non-Illinois law for Illinois claims, or require out-of-state venues. Employers may also want to confirm any mutual provisions meet WTA conditions and include the expanded acknowledgments.

HR and legal training. To prepare for compliance with the law, consider training HR, legal, and business stakeholders on the amended WTA’s scope, the broadened definition of unlawful employment practices, concerted activity protections, the separate-consideration requirement for confidentiality, and the enhanced remedies.

Implementation timeline. Employers may want to target completion of drafting updates, internal trainings, and template rollouts before January 1, 2026. Applying updated language to any agreement entered into, modified, or extended on or after the effective date is an important element in this step.

Ogletree Deakins’ Chicago office will continue to monitor developments and will post updates on the Illinois, Traditional Labor Relations, Unfair Competition and Trade Secrets, Wage and Hour, and Workplace Safety and Health blogs as additional information becomes available.

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