On June 1, a new law will be taking effect that local government employers should be aware of. The law requires them to disclose severance agreements when they are requested pursuant to the Freedom of Information Act.
The Freedom of Information Act (FOIA) provides the public with the right to request access to government records. Once a governmental body receives a FOIA request, it has 5 business days to either grant or deny the request. If complying with the FOIA request will take a lot of time or be particularly difficult, the governmental body may request a 5 business day extension for time to comply with the request. While the Act favors disclosure of public records, it does permit local governments to withhold certain records in some circumstances.
Severance agreements, however, are no longer among the records which may be withheld. The Act defines a severance agreement as an “agreement between any public body and its employee for the employee’s resignation in exchange for payment by the public body.”
Severance agreements are often used by employers when firing an employee, as they can provide employers with protection. Severance agreements will often say that in exchange for receiving a sum of money, a fired employee is not permitted to sue the employer. Sometimes they will prevent an employee from competing against his former employer for a period of time, or they will require the employee to keep employer information confidential.
The new law prohibits governments from withholding information related to the amount paid to the employee, any allegations or evidence concerning the employee’s misconduct, and most other information. The law does allow governments to refrain from disclosing trade secrets, proprietary information, and a limited amount of other information.
This law was passed in response to the outrage over the former Metra CEO receiving a severance package of over $700,000. The law does not apply to severance agreements entered into prior to January 1, 2016, so this law would not require Metra to disclose that severance agreement.
Visit Ancel Glink’s website for more information on the Freedom of Information Act, and what your local government’s responsibilities are under the Act. Contact an Ancel Glink attorney with any specific questions related to the Freedom of Information Act or severance agreements.