Last week, the Illinois Supreme Court ruled that the Illinois Workers' Compensation Act (IWCA) does not preempt claims for damages under the Illinois Biometric Information Privacy Act (BIPA). This watershed opinion, McDonald v. Symphony Bronzeville Park, LLC, 2022 IL 126511, eliminated what Illinois employers hoped would be a key defense against employee-brought BIPA claims. This major ruling is just one of many important developments surrounding this hotly contested Illinois statute that are unfolding in real time. Here’s a look at some of the BIPA litigation trends and key rulings to watch for in 2022.
Illinois Supreme Court Ruled that BIPA is Not Preempted by IWCA
On February 3, 2022, the McDonald Court ruled that an employer’s violation of an employee’s privacy rights under BIPA is not a work-related injury under the IWCA, and, thus, employee claims against an employer for violation of BIPA are not preempted by the exclusive remedy provision of the IWCA. In so ruling, the Court held that the injury caused by a BIPA violation is not within the scope of the physical and psychological injuries that are “compensable” under the IWCA. Many cases had been stayed pending the outcome of the McDonald appeal, which will now go forward under a new paradigm.
This ruling matters because it exponentially increases the potential liability of employers to employees who have no actual injuries apart from the violation of their statutory rights. Rather than being limited to worker’s compensation for actual injury, BIPA plaintiffs can recover, for each violation, $1,000 in liquidated damages or their actual damages, whichever is greater, for negligent violations or $5,000 in liquidated damages or their actual damages, whichever is greater, for reckless violations. 740 ILCS § 14/20. These liquidated damages can compound rapidly – particularly in class actions – if each BIPA noncompliant finger scan represents its own separate violation, as the First District of the Illinois Appellate Court recently ruled in Watson v. Legacy Healthcare Financial Sercices, LLC, 2021 IL App (1st) 210279.
Illinois Supreme Court Will Address Claim Accrual Under BIPA
Corporate defendants should also watch for the Illinois Supreme Court’s answer to the question certified by the Seventh Circuit Court of Appeals in Cothron v. White Castle: When does a cause of action accrue under BIPA? Specifically, the Court will determine whether a BIPA claim accrues each time a private entity collects or discloses a person’s biometric information or only the first time the biometric information is collected or disclosed.
In addition to determining when the statute of limitations period starts running for claims brought under BIPA, the accrual question will determine whether continuing or repeated violations of the Act constitute separate claims. And, because the Act imposes liquidated damages for each violation of the Act, the answer to the accrual question has major implications on corporate defendants’ ability to limit the size of putative classes and potential damages. Read our prior analysis of the Cothron case here.
The Seventh Circuit certified the claim accrual question to the Illinois Supreme Court in December of last year. Many BIPA cases were stayed pending the outcome of the Cothron case, which is now on ice until the Illinois Supreme Court issues an opinion answering the certified question, and that could take months.
New Strains of BIPA Cases Based on Other Technologies Are Developing
Although early BIPA cases largely involved employee time and attendance monitoring systems (i.e., fingerprint scans), new cases are taking on other technologies. For example, corporate defendants can expect to see a wave of new cases involving the use of “dash-cam” telematics. Plaintiffs are arguing that in-vehicle cameras in commercial fleets, including those that use artificial intelligence to collect and analyze information on driver behavior, are collecting biometric information protected by BIPA.
Since the beginning of the new year, at least two new BIPA class actions – Hernandez v. Omnitracs, LLC and Arendt et al. v. Netradyne Inc. – have been filed concerning driver monitoring systems, following a similar class action brought against Maverick Transportation LLC and Lytx Inc. in November. These cases should put companies utilizing this technology on notice that if they have a connection to Illinois, they need to make sure they are in compliance with BIPA, including obtaining informed consent prior to collection.
Companies Continue to Litigate Federal Preemption Defenses
Preemption of BIPA claims by federal laws that regulate employee relations or certain industries has emerged as an important defense. In recent cases, the Seventh Circuit and district courts have sided with defendants, dismissing employee-initiated BIPA class actions on the grounds that the claims were preempted by federal laws such as the Railway Labor Act and the Labor Management and Relations Act. In those cases, the courts held that the issue of consent to collection of biometric information was covered by a collective bargaining agreement, and is thus subject to those federal employment laws.
Going forward, corporate defendants should stay attuned to how courts respond to preemption defenses based on federal statutes that are unrelated to unionization, such as those governing privacy and security. For example, in December of last year, the Federal Trade Commission announced that it was considering a rule-making under Section 18 of the FTC Act “to curb lax security practices, limit privacy abuses, and ensure that algorithmic decision-making does not result in unlawful discrimination.” This may represent a new area of federal preemption of BIPA claims.
Companies Continue to Litigate Exclusions under BIPA
BIPA does not apply to certain entities, including government agencies, their contractors and subcontractors, and financial institutions subject to the Gramm-Leach Bliley Act. The scope of exclusions under BIPA has become a hot topic of litigation, a trend that will continue in 2022.
Novack and Macey LLP will continue to monitor developments in BIPA litigation and how these trends might impact our clients.
About the Author: Hannah Griffin Garlough is a senior associate at Novack Macey LLP and a member of the firm’s Manufacturing Industry Disputes group. To contact the author, please email Hannah B. Griffin Garlough at email@example.com or call 312.419.6900. Novack and Macey represents clients in all areas of employment law, including wage-and-hour suits, Title VII claims, ERISA and pension contribution issues, and disputes involving restrictive covenants and non-compete provisions.