Recent amendments to the Illinois Workplace Transparency Act (WTA) (HB 3638) require changes to Illinois employment agreements and separation agreements, beginning as of January 1, 2026.

The WTA, first enacted in response to the #MeToo movement, imposes certain procedural requirements on employment-related contracts for Illinois employees. These amendments impose additional restrictions, the most significant of which involves confidentiality clauses in separation agreements.

Overview of Key Changes:

• Confidentiality clauses must be supported by a separate allocation of consideration. The WTA already requires that termination and settlement agreements provide valid, bargained-for consideration in exchange for a promise of confidentiality. Under the amended law, there must be a specific allocation of consideration expressly in exchange for such a promise of confidentiality, separate from any allocation for a release of claims.
• Restrictions on choice of law and other language limiting dispute resolution. Under the amendments, employment agreement clauses that unilaterally shorten the statute of limitations for a potential claim, seek to apply the law of a jurisdiction other than Illinois to an Illinois state law claim, or require a judicial venue outside of Illinois, are void.
• Protection of concerted activity. The amendments provide that no employment agreement clause can unilaterally limit an employee from engaging in concerted activity (i.e., collective bargaining or...

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