January 2008

Important Changes in the Law

We wish our clients and friends a happy, healthy and prosperous New Year. As in the past, the New Year invariably ushers in new laws that will significantly affect businesses. This Legal Update focuses on several of the new laws and their impact.

Effective January 1, 2008, the Illinois Human Rights Act ("IHRA") has been amended to give Illinois employees the option to bring a claim for discrimination, harassment or retaliation under the IHRA in an Illinois circuit court and demand a jury. The amendment to the IHRA will bring about significant changes in how claims under the IHRA are litigated.

Before the amendments, the Illinois Department of Human Rights ("IDHR") investigated charges brought under the IHRA and decided whether there was substantial evidence of a civil rights violation to have the case heard by an administrative law judge of the Illinois Human Rights Commission ("Commission"). If the IDHR found substantial evidence and the matter could not be resolved, the IDHR would file a complaint with the Commission and present the employee's case before an administrative law judge assigned by the Commission. The IDHR dismissed the charge if it did not find substantial evidence. The employee's only recourse from a dismissal was to request review of the dismissal by the IDHR's chief legal counsel. An employee had no right to sue in state court following dismissal of a charge.

Under the amended law, employees still must initially file charges of discrimination, harassment or retaliation under the IHRA with the IDHR. But an employee will now have the option of filing a lawsuit in the Illinois circuit court where the civil rights violation allegedly occurred whether the IDHR finds substantial evidence of a violation of the IHRA or dismisses a charge for lack of substantial evidence. In addition, if the IDHR fails to make any determination within one year of the filing of a charge, an employee will likewise have the option of filing a lawsuit in state court.

The changes to the IHRA will have a significant impact on employers. For the first time, employers will face the prospect of having to defend against alleged civil rights violations in state court, as well as having a jury - rather than an administrative law judge in the Commission - determine the facts, decide whether there is liability and set the amount of damages. Moreover, employees who opt to file suit in state court will have the right to take full discovery from employers, including depositions of co-employees and management. In contrast, in cases before the Commission, while written discovery is permitted, the parties are rarely allowed discovery depositions. Further, state court judges who preside over a wide array of cases cannot be expected to have the experience of the administrative law judges in the Commission, who only preside over civil rights suits under the IHRA.

In sum, the defense of claims of civil rights violations under the IHRA is likely to become more costly, and employers may face greater uncertainty defending against such claims in state court. It is therefore all the more essential that employers follow good employment practices, including: adopting and enforcing a written "zero tolerance" anti-harassment/discrimination/retaliation policy that has been prepared or reviewed by experienced employment counsel, providing anti-harassment/discrimination/retaliation training to managers, supervisors and HR personnel, and documenting employee performance problems, as well any counseling given to address such problems.

Illinois joined more than 20 other states with no-smoking laws when the Smoke Free Illinois Act went into effect on January 1, 2008. The law bans smoking in places of employment and indoor public places, including restaurants, bars, concert halls, offices, private clubs, and lobbies, and within 15 feet of any entrance to a public place or place of employment. Exempted from the ban are private residences, unless used as a child care, adult day care, or healthcare facility, or any other home-based business open to the public; retail tobacco stores in operation prior to January 1, 2008; private and semi-private rooms in nursing homes or long-term care facilities if occupied by persons who are all smokers and have requested a room where is smoking is permitted (as long as the smoke does not infiltrate other areas); and hotel and motel rooms that are designated as smoking rooms.

The Smoke Free Illinois Act requires that "No Smoking" signs or the international "No Smoking" symbols be clearly and conspicuously posted in each public place and place of employment where smoking is prohibited, and at every entrance to such public place or place of employment. Signs that comply with the law can be found at http://www.idph.state.il.us/smokefree/smokefreesigns.htm

A person who smokes in an area where smoking is banned is subject to a fine of not less than $100 and not more than $250. A person who owns, operates or controls the area a public place or place of employment that violates the smoking ban is subject to a fine of not less than $250 for the first violation, not less than $500 for the second violation within one year of the first violation, and not less than $2,500 for each additional violation within one year of the first violation.

The Illinois Employee Classification Act, also effective January 1, 2008, is aimed at protecting workers in the construction industry from being misclassified as independent contractors - a practice that denied workers critical protections under state and federal law, such as overtime pay, workers' compensation and unemployment insurance, and also enabled contractors that misclassified workers to underbid those who did not.

The new law deems an individual performing work for a contractor an employee unless it is shown that:
(1) the individual is free from control or direction over the performance of the service for the contractor;
(2) the service is outside the usual course of services of the contractor; (3) the individual is in an independently established trade, occupation, profession or business; or (4) the individual is shown to be a legitimate sole proprietor or partnership performing work as a subcontractor under a 12-factor test. The Illinois Department of Labor is authorized to investigate complaints of alleged violations of the new law and to assess civil penalties. In addition, the new law provides an individual or interested party with the right to file a private lawsuit and recover, among other relief, any wages, employment benefits or other compensation denied or lost by reason of the misclassification, as well as attorney's fees.

FVLD publishes updates on legal issues and summaries of legal topics for its clients and friends solely for general informational purposes. They do not constitute legal advice, nor are they intended as a substitute for obtaining legal or other professional advice based upon specific factual circumstances or issues. We welcome comments or questions. If we can be of assistance, please call or write Glenn Rice, 312.701.6895, grice@fvldlaw.com, Jonathan Vegosen, 312.701.6860, jvegosen@fvldlaw.com, or consult with your regular FVLD contact.