Last week, the Illinois House Labor & Commerce Committee approved an amendment to the Employment Contract Act to provide that an employer may not require employees and applicants to “waive, arbitrate, or otherwise diminish any future claim, right, or benefit to which the person would otherwise be entitled under State or federal law.”
By its language, the new law would make it unlawful for employers to condition a hiring or continued employment on many types of agreements that have become increasingly common, particularly in the wake of the Supreme Court’s 2018 holding in Epic Systems v. Lewis upholding employment class action waivers.
As currently drafted, the law could make illegal:
- Employment class action waivers
- Arbitration agreements
- Waivers of jury trial rights in employment lawsuits
- So called “Forum selection” agreements that lawsuits can only be filed in certain courts.
- Agreements to shorten statutes of limitations (or filing deadlines) on employment claims.
Whether the law, as written, would survive legal challenges, is open to question. For instance, it’s possible the courts could strike down any ban on arbitration agreements as preempted by the Federal Arbitration Act. Despite this risk, employers should expect more legislation similar to this bill, as politicians continue to grapple with the lessons of the #metoo moment.
The bill passed committee by a vote of 21-4 and now heads to a full vote by the Illinois legislature.
The text of the proposed law can be found here.
Gary Savine is an Illinois employment lawyer and founder of Savine Employment Law, Ltd. in Chicago. Gary regularly advises businesses on recently enacted employment laws. Gary performs compliance audits for employers seeking to keep their employment policies current.