Update Applicable to:	Effective Date
All Employers in Illinois	January 1, 2026

What happened?

On June 24, 2025, Illinois Governor J.B. Pritzker signed House Bill (HB) 3638, a measure amending the Workplace Transparency Act to strengthen employee protections in employment agreements, particularly around confidentiality, reporting rights, and concerted activity.

Overview:

Key Provisions of HB3638

Section 1-5: Purpose: Clarifies Illinois’ commitment to preventing workplace discrimination and harassment, while ensuring fair and transparent employment contracts.

Section 1-10: Application: Excludes collective bargaining agreements under federal and state labor laws. Applies to contracts entered, modified, or extended after January 1, 2026.

Section 1-15: Definitions: Expands definitions to include:

• Concerted activity: Protected actions for mutual aid or bargaining.
• Unlawful employment practice: Includes violations under state and federal laws.
• Differentiates mutual vs. unilateral employment conditions.

Section 1-20: Reporting of Allegations: Prohibits any agreement from restricting:

1. Reporting unlawful conduct to authorities.
2. Participating in concerted activity to address workplace issues.

Section 1-25: Conditions of Employment

• Unilateral conditions that restrict disclosures or rights are void.
• Mutual conditions are allowed only if:
  • Written and bargained-for.
  • Acknowledge employee rights to report, testify, seek legal advice, and engage in protected activity.
• Failure to meet these standards creates a presumption of invalidity.

Section 1-30: Settlement or Termination Agreements: Confidentiality clauses are enforceable only if:

1. Confidentiality is the employee’s documented preference.
2. Employee is informed of their right to legal review.
3. Separate consideration is provided.
4. Claims after execution are not waived.
5. Employee has 21 days to review and 7 days to revoke.
6. Employers cannot unilaterally impose confidentiality or misrepresent employee preference.
7. Non-compliance renders confidentiality provisions void.

Section 1-35: Damages, Costs, and Attorney’s Fees: Employees may recover compensatory damages, attorney’s fees, and costs when successfully challenging unlawful agreements.

Section 1-40: Right to Testify: Any agreement that waives an employee’s right to testify in legal or administrative proceedings is void if testimony is required by subpoena, court order, or agency request.

Source References

• Illinois HB 3638 – WORK TRANSPARENCY-CONFIDENTIAL – (Public Act 104-0320)

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