CHICAGO — A federal judge has granted an early nod to a deal, worth as much as $14 million, brokered to end a potentially sprawling class action under Illinois' biometric privacy law that had targeted employee punch clock maker NovaTime.
The legal action was launched in the summer of 2019 when lawyers with the firms of Stephan Zouras LLP, of Chicago, and Peiffer Wolf Carr & Kane APLC, of St. Louis, sued the Rancho Cucamonga, Calif.-based NovaTime in Cook County Circuit Court on behalf of named plaintiff Timothy Thome. The complaint alleges violation of the Illinois Biometric Information Privacy Act.
Thome worked for placement firm FlexiCorps, of suburban St. Charles, and had been assigned to a temp position at Plano Molding in 2017. According to the complaint, Thome used a NovaTime data reader to start and end shifts with a fingerprint scan. But the lawsuit asserted neither NovaTime nor Flexicorps secured written authorization from workers to scan fingerprints, nor did the companies provide any notice or other information to workers concerning how the scanned prints would be stored, used, shared or ultimately destroyed.
After months of litigation and two court-ordered mediation sessions, the sides reached an agreement in October under which NovaTime will enter into a confession of judgment and assignment of rights for $14.1 million. The class members would have access to a $4.1 million settlement fund, with about $1.36 million of that total set aside for class attorneys. The plaintiffs' lawyers, however, have retained separate attorneys of their own to review insurance policies NovaTime and its parent company, Ascentis, have with insurers Axis and CNA that the plaintiffs believe could provide class members access to the additional $10 million.
In an order issued Oct. 20, U.S. District Judge Matthew Kennelly granted preliminary approval of the terms, including establishment of a settlement class for anyone who used a NovaTime biometric timekeeping system in Illinois starting in mid-August 2014.
According to Thome’s motion in support of settlement, the class could include more than 62,000 people. Each person who submits a valid claim form stands to collect as much as $330, less attorney fees, out of the $4.1 million pool, plus an additional $800, should the court boost the settlement fund by an additional $10 million from the insurance policy proceeds. Those amounts are based on the assumption “a relatively high 20% of class members submit a claim form,” according to the plaintiffs' lawyers. All class members, however, would retain the right to bring lawsuits of their own against their employers for also allegedly violating BIPA, by requiring their workers to use NovaTime's fingerprint scanner punch clocks.
In September 2019, NovaTime removed the complaint from Cook County court to federal court. It first moved for dismissal in October 2019. In Feburary 2020, NovaTime again attempted to end the lawsuit by asking Kennelly to allow it to file a motion to scuttle class certification. At the time, NovaTime argued the suit was improper because the alleged violations were the responsibility of the employers who used the clocks, not the vendors who supplied the technology.
“Each individual employee of a third-party employer that utilized NovaTime technology will be governed by different collective bargaining agreements, mandatory arbitration agreements, waivers, consents, exemptions within BIPA itself, and other preemptive federal law which may limit or bar NovaTime’s BIPA liability,” the company argued at the time. “This tangled web of legal rights and restrictions creates individualized questions of law and fact that predominate over any issues common to all class members.”
Kennelly denied that motion, determining NovaTime forfeited its right to make such a motion and also that it was premature given there wasn’t an active motion to certify the class at the time.
Other timeclock and employee payroll vendors are the subject of similar litigation under the Illinois BIPA law, including industry leaders Kronos and ADP. The Stephan Zouras firm also represents plaintiffs in many of those actions, as well as many other BIPA-related class actions againsty individual employers.
NovaTime is represented by attorneys Joseph M. Sokolowski and Erin M. Edgerton, of the firm of Fredrikson & Byron P.A., of Minneapolis.
A final approval hearing is set for Feb. 11.