Update Regarding Confidentiality Provisions in Employee Separation Agreements in Illinois

January 2026

Gabriel J. Kahn

On January 1, 2026, several amendments to the Illinois Workplace Transparency Act (WTA) became effective. The WTA settlement, severance, and termination agreements involving alleged unlawful employment practices, including release and resignation agreements. The following changes are now in effect:

The WTA definition of an “unlawful employment practice” is expanded to include any unlawful practice actionable under state or federal employment laws. This includes laws 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. Now, under the WTA’s expanded definition, employers cannot restrict employees from reporting wage claims or safety concerns. Additionally, employment contract language now must avoid language that restricts an employee from engaging in “concerted activity.”

In a noteworthy change, any confidentiality clause in a settlement or termination agreement requires consideration that is distinct and separate from any consideration provided for the traditional release of claims. Based on this amendment, employee separation agreements with confidentiality provisions will likely need to include a separate allocation of consideration for the confidentiality clause.

Moreover, prior to the amendments, the WTA required that confidentiality be the “documented preference of the employee.” Now, the employer may not unilaterally include any clause in these types of agreements that states that the promise of confidentiality is the preference of the employee. Similarly, agreements may not unilaterally shorten statute of limitations or apply non-Illinois law to Illinois-based claims.

The amended WTA also expands available remedies for employees, prospective employees, and former employees. The Act now allows the recovery of consequential or indirect financial damages in addition to attorney’s fees and costs. Further, the amendments extend these remedies beyond claims regarding enforceability of the contract to now include success in defending a claim for breach of a confidentiality agreement.

To ensure WTA compliance, it is vital for Illinois employers to update employment-related agreements, including settlement, severance, termination, and release and resignation agreements. The good news is that BCM Law, P.C. is well equipped to provide efficient services to update employment-related agreements affected by the WTA amendments. Feel free to contact us should you require our services.