On August 15, 2025, Illinois Governor JB Pritzker signed HB 3638 into law, amending the Illinois Workplace Transparency Act (IWTA) and imposing additional obligations on employers to ensure that their employment contracts – including settlement agreements, termination agreements, and arbitration agreements – omit language that may restrict employees from reporting or disclosing allegations of unlawful conduct in the workplace.
The revised provisions apply to any employment contract entered into, modified, or extended on or after January 1, 2026, except for collective bargaining agreements covered by the National Labor Relations Act or the Illinois Public Labor Relations Act.
HB 3638 includes the following changes:
Expands definition of “unlawful employment practice”
Prior to the amendments, the IWTA voided any contract that interfered with an employee’s ability to disclose or report claims of unlawful employment practices, i.e., any form of discrimination, harassment, or retaliation. Now, the amendments expand the scope of “unlawful employment practices” to include any unlawful practice actionable under state or federal employment law including those enforced by the Illinois Department of Labor, the Illinois Labor Relations Board, the U.S. Department of Labor, the Occupational Safety and Health Administration, or National Labor Relations Board. Notably, this includes wage claims and purported safety issues that go beyond claims of discrimination or retaliation.
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