Does IL workers’ comp trump biometric privacy law? IL Supreme Court considers, with ‘financial fate of IL employers at stake’

Saying the “financial fate” of Illinois employers could ride on the decision, the operators of a Chicago nursing home have asked the justices of the Illinois Supreme Court to rein in the state’s sweeping biometrics privacy law, which has created a stampede of class actions targeting Illinois businesses, by declaring workers’ claims against their employers under the biometrics law actually should be classified as workers’ compensation claims.

Attorneys for workers at the nursing home, however, say the potential deep financial pain facing employers was “part of the point” of the law. They argue employers shouldn’t be allowed to use the state’s workers’ comp system to win “blanket immunity” from the consequences for allegedly violating their workers’ privacy rights under the Illinois Biometric Information Protection Act.

Attorneys for both sides presented their arguments before the Illinois Supreme Court on Sept. 23.

For years, employers in Illinois have faced a growing threat, as a cadre of plaintiffs lawyers have mounted a blitz of class action lawsuits against them under the Illinois BIPA law.

Enacted in 2008, the BIPA law was put on the books ostensibly to address the risk Illinois residents might face from a potential breach of data that could include their so-called biometric data, including unique physical identifiers, such as fingerprints, retinal scans or facial geometry.

The law included provisions allegedly requiring businesses to obtain written consent from people before scanning, storing or sharing Illinois residents’ biometric data, and requiring businesses to provide notice to Illinois residents concerning the purposes for the biometric data collection, and how the data would be used, stored, shared and ultimately destroyed.

However, after the law sat quietly on the books for years, plaintiffs’ lawyers began filing class action lawsuits under BIPA’s notice and consent provisions about six years ago.

Many of the lawsuits have targeted tech companies, including such online titans as Facebook and Google, among others.

However, the overwhelming bulk of BIPA class actions have targeted employers. Hundreds of such lawsuits have been filed in Illinois courts, primarily in Cook County, usually accusing employers of violating employees’ BIPA rights by allegedly failing to meet BIPA’s notice and consent requirements before requiring workers to scan fingerprints or other biometric identifier to prove their identity when punching the clock or accessing a secure or sensitive location within a workplace, such as a cash register room at a retail store or medicine cabinet at a hospital.

In 2017, lawyers with the firm of Edelson P.C., of Chicago, filed such a class action on behalf of named plaintiff Marquita McDonald and other workers at the Symphony of Bronzeville nursing home, on Chicago’s South Side.

They asserted the nursing home operator failed to obtain consent from workers, or provide proper notice to workers, before they clocked in and out of work shifts, using the nursing home’s “biometric timeclocks,” which required workers to scan a fingerprint to verify their identity.

Such lawsuits carry potentially massive financial risks to employers. The BIPA law allows plaintiffs to seek damages of $1,000-$5,000 per violation. And the law has been interpreted in courts to define individual violations as each time a worker scans their fingerprint.

Even moderate-sized employers could face potentially many millions of dollars in damages, should a court enter a judgment against them. Large employers could be on the hook for even more, perhaps billions of dollars in damages.

Facing such risk, employers have struggled to find ways to limit the scope and reach of the BIPA law, and reduce the likelihood of near automatic large paydays for plaintiffs and their lawyers.

In the Symphony Bronzeville case, the nursing home has asserted the BIPA claims brought by workers actually have no place in court at all. Rather, they argue, since workers are claiming they have suffered “injuries” to their privacy rights while at work, the claims actually belong in the state’s workers’ comp system.

To this point, judges have taken a dim view of that argument. A Cook County judge rejected that argument, and that ruling was upheld by the Illinois First District Appellate Court.

The appellate justices found the “injuries” claimed by workers under the BIPA law aren’t the same as the physical or mental workplace injuries that are typically automatically sent to the state’s workers’ compensation commission under the so-called exclusivity provision within the Illinois Workers’ Comp Act.

Symphony Bronzeville appealed that decision to the Illinois Supreme Court.

And on Sept. 23, the nursing home told the justices of the state high court that the lower courts have gotten the case “completely wrong,” as the exclusivity provision in the workers’ comp law should trump the BIPA law, as applied to employers, and block the massive class actions aimed at employers over violations allegedly suffered by workers while in the workplace.

They argued that Illinois’ workers’ comp system routinely accepts claims for “non-physical” injuries, and BIPA-related claims should be treated no differently.

Attorney Richard P. McArdle, of the Seyfarth firm, of Chicago, argued the plaintiffs in the Symphony case are asking the court to upend decades of case law surrounding workers’ comp claims, and substitute the court’s opinion for that of the state legislature or voters.

They are “asking the court to create out of whole cloth a new judicial exception to the plain language of the exclusivity provisions,” McArdle said.

“Make no mistake about it. There are billions – without exaggeration – billions of dollars at stake for Illinois employers facing these class action lawsuits,” McArdle said. “And the plaintiff is asking that seven individuals outside of the ballot box decide the financial fate of those employers and in turn the employment status of those employees.

“This is a monumental decision.”

In response, attorney Aaron Lawson, of the Edelson firm, argued BIPA claims are fundamentally different from other workplace injury claims.

Physical and psychological injuries that are typically covered by the workers’ comp law can leave workers unable to do their jobs, Lawson said. By contrast, BIPA injuries involve only a violation of a workers’ privacy rights.

He said the workers’ comp system involves a “bargain” between workers and employers, in which workers agree to surrender many of their rights to sue for injuries suffered on the job, while employers gain a limit on how much they may need to pay for such injuries.

BIPA claims, Lawson said, fall outside the scope of that “bargain.”

He said employers, like Symphony Bronzeville, are simply trying to use the workers’ comp system to secure “blanket immunity” from potentially large, painful payouts under the BIPA law.

Lawson urged the court to set aside concerns over the potential harm to employers, saying lawmakers intended to give workers the ability to lodge such class actions, regardless of worry over the impact it might have on a business’ future viability.

Lawson said the “substantial potential liability” faced by employers is “part of the point” of the “remedial scheme” created by Illinois lawmakers through BIPA to “incentivize compliance” by employers and other businesses.

He noted the law empowers people to sue, but includes no provisions for the state itself to enforce the law.

“I think it is inconceivable that a legislature would create this remedial scheme in a law that it says explicitly applies in the workplace …. knowing and intending that this somewhat unique remedial scheme would be inoperable with respect to anyone in Illinois who is an employee,” Lawson said.

In questioning, Supreme Court justices appeared to focus on the question of where to draw the line between non-physical injuries that should be compensated through the workers’ comp system, and those that are fair game for massive class action lawsuits.

Justices, for example, raised questions over whether sexual harassment should be considered a workers’ comp claim if it occurs in the workplace, under the theory advanced by Symphony.

They also pondered whether the intentions of the employer should be taken into consideration in determining whether a BIPA injury can be considered an “accident,” akin to a traditional workers’ comp claim.

McArdle asserted most employers targeted by such class actions had no knowledge of BIPA’s requirements before being sued, and had instituted biometric timekeeping to better ensure they could avoid lawsuits or regulatory action by the state under Illinois wage laws. He said the “accident” involved failing to comply with the BIPA requirements, which employers did not existed.

“Their intent was to comply with the wage and hour law, not to violate the biometrics law,” McArdle said.

Justices, however, questioned that position.

While employers may have “accidentally” violated BIPA, justices noted employers “intentionally … put the machines into” their workplaces, and “told them (workers) to use it.”

“There’s a statute out there … that employers should be aware of, that limits dramatically the capture of biometric info without consent,” said Justice Mary Jane Theis. “If an employer disregards that statute, isn’t that an intentional act?”

The Illinois Supreme Court has not yet ruled on the matter.

This article was first published in Cook County Record.

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