Guide · Employment · Workplace Transparency

The Illinois Workplace Transparency Act: Confidentiality Terms, Separation Agreements, and Harassment Training

What Illinois law, as amended effective January 1, 2026, allows in offer letters, arbitration agreements, and settlement or separation agreements, what no agreement can take away, and what the State and the City of Chicago require for harassment policies and annual training.

By Lincoln Square Law · 13-minute read

An Illinois employer meets the Workplace Transparency Act at three points: the offer letter or arbitration agreement, the settlement or separation agreement, and the year’s harassment training. A confidentiality or waiver term that misses the Act’s conditions is void and severable, and a worker who wins that point may recover consequential damages, attorney’s fees, and costs (820 ILCS 96/1-30(c), 96/1-35). Public Act 104-320 rewrote much of the Act effective January 1, 2026, so templates drafted earlier need a fresh review even if they complied when written.

What the 2026 amendments changed

Three changes in Public Act 104-320 matter most to a drafter (P.A. 104-320). “Unlawful employment practice” now covers any practice actionable under Article 2 of the Human Rights Act, Title VII, or any other State or federal law governing employment, including laws enforced by the Illinois Department of Labor, OSHA, and the NLRB, so wage and safety claims are now within the Act (820 ILCS 96/1-15). The Act protects “concerted activity,” defined by reference to 29 U.S.C. 157 as it existed on January 19, 2025 (820 ILCS 96/1-15, 96/1-20). And confidentiality in a settlement needs consideration separate from the payment for the release (820 ILCS 96/1-30(a)(3)).

The Act applies to contracts entered into, modified, or extended on or after its effective date (820 ILCS 96/1-10(c)). Draft anything signed, amended, or renewed in 2026 to the amended text, and resolve whether the changes reach an untouched older agreement before relying on it.

Who the Act covers

The Act uses the Human Rights Act’s definitions, so it reaches any person employing one or more employees in Illinois during 20 or more calendar weeks in the year of or before the violation, and it protects nonemployees such as contractors directly performing services under a contract, as well as prospective and former employees (820 ILCS 96/1-15, 775 ILCS 5/2-101(B)(1)(a)). A collective bargaining agreement subject to the Illinois Public Labor Relations Act or the National Labor Relations Act is outside the Act and controls if the two conflict (820 ILCS 96/1-10(a)).

Offer letters, handbooks, and other conditions of employment

The Act sorts employment terms into two kinds. A unilateral condition is one the worker must accept as a non-negotiable material term to get or keep the job. A mutual condition is negotiated in good faith, for consideration (820 ILCS 96/1-15). A unilateral condition that has the purpose or effect of preventing truthful statements or disclosures about alleged unlawful employment practices, or concerted activity, is void to that extent and severable (820 ILCS 96/1-25(a)). The Act does not use the word “non-disparagement,” but in our reading a non-disparagement clause imposed as a condition of employment is reached to the extent it would stop a truthful statement about conduct the worker believes is unlawful.

A mutual condition may include terms the Act would otherwise void, but only if it is in writing, shows actual, knowing, and bargained-for consideration from both parties, and acknowledges the worker’s right to report good faith allegations of unlawful employment practices and criminal conduct to the appropriate agencies and officials, to participate in related proceedings, to make truthful statements required by law, to request or receive confidential legal advice, and to engage in concerted activity about work-related issues (820 ILCS 96/1-25(c)). An agreement missing any element is presumed, subject to rebuttal, to be unilateral (820 ILCS 96/1-25(d)). A template signed without change, reciting that it was “negotiated,” is unlikely to overcome that presumption.

Arbitration, limitation periods, and forum terms

A unilateral condition that requires a worker to waive, arbitrate, or otherwise diminish a claim related to an unlawful employment practice is void to the extent it denies a substantive or procedural right or remedy (820 ILCS 96/1-25(b)). That rule predates 2026. The amendment adds express coverage of shortened limitation periods, non-Illinois choice of law, and venue outside Illinois, and the broader definition of unlawful employment practice carries the rule to wage, leave, and safety claims.

Two federal statutes sit beside that rule. The Federal Arbitration Act makes a written arbitration provision in a contract involving commerce enforceable, save upon grounds that exist for the revocation of any contract (9 U.S.C. 2). How far the Illinois rule operates against it is a question to put to counsel before keeping, revising, or renegotiating an arbitration program. And for a sexual harassment or sexual assault dispute arising on or after March 3, 2022, the person alleging the conduct may elect court over a predispute arbitration agreement or joint-action waiver, with a court deciding whether that rule applies (9 U.S.C. 402(a), (b)).

Confidentiality in settlement and separation agreements

A settlement or termination agreement may include promises of confidentiality about alleged unlawful employment practices, other than future concerted activity about workplace conditions, only if all six conditions are met (820 ILCS 96/1-30(a)):

• Confidentiality is the documented preference of the employee and is mutually beneficial (820 ILCS 96/1-30(a)(1)).
• The employer tells the employee in writing of the right to have an attorney or representative of the employee’s choice review the agreement before signing (820 ILCS 96/1-30(a)(2)).
• There is bargained-for consideration for the confidentiality, separate from any consideration for the release of claims (820 ILCS 96/1-30(a)(3)).
• The agreement does not waive claims that accrue after it is signed (820 ILCS 96/1-30(a)(4)).
• The employee receives the agreement in writing and has 21 calendar days to consider it, and may sign sooner by knowingly and voluntarily waiving the remaining time (820 ILCS 96/1-30(a)(5)).
• Unless knowingly and voluntarily waived, the employee has 7 calendar days after signing to revoke, and the agreement is not effective until that period ends (820 ILCS 96/1-30(a)(6)).

The employer may not unilaterally include a clause barring truthful statements about unlawful employment practices, or one stating that confidentiality was the employee’s preference (820 ILCS 96/1-30(b)). A recital in the employer’s form is therefore not the documentation the Act asks for. The better record is a written request from the employee or counsel, made before the term is drafted. A missed condition voids the confidentiality promise but leaves the rest of the agreement, including a release of claims that arose before signing, in place (820 ILCS 96/1-30(c), (d)).

Reports, testimony, and investigations

No agreement may restrict a current, prospective, or former employee from reporting allegations of unlawful conduct to federal, State, or local officials, or from concerted activity about work-related issues (820 ILCS 96/1-20). A waiver of the right to testify about alleged criminal conduct or unlawful employment practices is void when the employee is required or requested to attend under a court order, subpoena, or written request from an administrative agency or the legislature (820 ILCS 96/1-40). Every confidentiality and non-disparagement clause should state these carve-outs in plain words.

Ordinary investigation practice survives. The Act does not limit confidentiality for staff who receive or investigate complaints, for witnesses asked to keep reasonable confidentiality during and after an investigation, for outside investigators, or for privileged material (820 ILCS 96/1-45). Federal law adds that a nondisclosure or nondisparagement clause agreed to before a sexual assault or sexual harassment dispute arises is not judicially enforceable in that dispute, though trade secrets may still be protected (42 U.S.C. 19403(a), (d)).

Remedies when a term fails

Before 2026 the Act gave a successful challenger attorney’s fees and costs. The amended Act adds consequential damages and extends recovery to a worker who defends a suit for breach of a confidentiality agreement, once a final, non-appealable ruling favors the worker (820 ILCS 96/1-35). An employer that sues on a defective confidentiality promise risks paying for both sides of the case.

Age discrimination releases and the Illinois clock

A release of claims under the federal Age Discrimination in Employment Act must be written to be understood, refer specifically to ADEA claims, exclude later claims, rest on consideration beyond what the employee is already owed, and advise the employee in writing to consult an attorney. The employee gets at least 21 days to consider it, or 45 days in a group exit program with its own written disclosures, and at least 7 days after signing to revoke (29 U.S.C. 626(f)(1)(A) to (H)). The Illinois Act lets the employee waive revocation, but the federal statute requires the agreement to provide it. Where both apply, we recommend one schedule built to the stricter rule.

Annual sexual harassment prevention training under the Human Rights Act

Every employer with employees working in Illinois must use the Illinois Department of Human Rights (IDHR) model program, or its own program that equals or exceeds the statutory minimum, at least once a year for all employees (775 ILCS 5/2-109). The minimum content is an explanation of sexual harassment under the Human Rights Act, examples of unlawful conduct, a summary of relevant federal and State law including remedies, and the employer’s responsibilities for prevention, investigation, and corrective action (775 ILCS 5/2-109(B)). IDHR posts the model program online at no cost (775 ILCS 5/2-109(C)).

IDHR’s answers to employer questions supply the detail. Short-term, part-time, and intern employees must be trained, as must anyone who works in Illinois for an employer based elsewhere, but independent contractors need not be. Every employee must be trained by December 31 of each calendar year, new staff as soon as possible after hire, the training must be accessible, and the employer must keep a record of all trainings for IDHR review (IDHR Training FAQs). An employer that falls short gets a notice to show cause and 30 days to comply before IDHR may seek a civil penalty (775 ILCS 5/2-109(D)). The caps run from $500 for a first offense by an employer with fewer than 4 employees to $5,000 for a third or later offense by an employer with 4 or more (775 ILCS 5/8-109.1). Restaurants and bars must also give a written policy in the first week of employment and use IDHR’s supplemental training or an equivalent (775 ILCS 5/2-110). For onboarding timing, see our new-hire compliance checklist.

Chicago’s policy, training, and posting rules

Chicago employers carry a second layer. The written policy must state that sexual harassment is illegal in Chicago, give the ordinance’s definition, describe the training requirements, give examples of prohibited conduct, explain how to make a confidential report with an internal complaint form to a manager, headquarters, or human resources, identify legal services available to employees, and state that retaliation is illegal in Chicago (Chicago Mun. Code 6-10-040(b)(1)). Each employee must receive it in the employee’s primary language within the first calendar week of employment (Chicago Mun. Code 6-10-040(b)(2)).

The City requires at least one hour of training a year for employees, two hours for supervisors and managers, and one hour of bystander training annually (Chicago Mun. Code 6-10-040(b)(1)(C)). Employers must post the Commission on Human Relations’ posters, at least one in English and one in Spanish, and keep the policy and each employee’s training records for at least five years, or longer while a claim or investigation is pending (Chicago Mun. Code 6-10-040(d), (e)). Fines run $500 to $1,000 per offense, and each day is a separate offense (Chicago Mun. Code 6-10-040(f)). A single annual program can satisfy the State and the City if it meets Chicago’s hours.

A drafting and review sequence for separation agreements

These steps are our recommendations, built on the requirements cited above. If the separation follows a contested decision, assemble the decision file first, as our white paper on retaliation decision records describes.

• List every claim being released, including wage, leave, and safety claims, and note any harassment allegation or complaint the employee has raised.
• Decide whether confidentiality is needed. If so, obtain the employee’s or counsel’s written preference and file it.
• State separate consideration for confidentiality and for the release.
• Write the reporting, testimony, legal advice, and concerted activity carve-outs into every confidentiality and non-disparagement clause, and limit the release to claims that accrued before signing.
• Deliver the agreement in writing with written notice of the right to attorney or representative review, and record the date.
• Allow 21 days to consider, or 45 days for a group program with an ADEA release, and do not ask for an early signature.
• Provide a 7-day revocation period, omit any revocation waiver where there is an ADEA release, and make payment due after revocation lapses.
• Remove shortened limitation, non-Illinois choice-of-law, and out-of-state venue terms for Illinois employees.
• Keep the drafts, negotiation correspondence, preference document, and signed agreement together.

Training records worth keeping

Neither IDHR nor Chicago prescribes a format. We recommend that each year’s training file hold:

• A roster of everyone who worked in Illinois that year, flagged for Chicago location and supervisory role.
• The training version used and a note mapping it to each minimum content item.
• Each employee’s completion date, duration, and any accessibility format or language, with the bystander hour and two-hour supervisor module for Chicago staff.
• Hire dates beside training dates, and for Chicago staff the date and language of first-week policy delivery.
• Each version of the written policy and posted notices, with the dates each was in effect.