Illinois employers could catch a reprieve from an ongoing onslaught of class action lawsuits under Illinois’ biometrics privacy law, as a bipartisan coalition of state lawmakers appear to be lining up behind new legislation to give employers a chance to correct technical violations before they turn into potentially crippling lawsuit payouts.
On March 9, the Illinois House Judiciary-Civil Committee voted 10-5-1 to advance HB559, legislation backed by a range of business groups and legal reform advocates to reform the Illinois Biometric Information Privacy Act, to prevent the law from continuing to be used by a group of trial lawyers to “extort” settlements from Illinois businesses.
Supporters of the reform legislation, such as bill sponsor House Republican Leader Jim Durkin, R-Westmont, said the changes will help to make Illinois a more palatable destination for employers and businesses.
Illinois Chamber of Commerce President Todd Maisch
“The key to this is, we’re trying to curb and rein in what has become a filthy cottage industry of class action lawsuits against businesses of all sizes, of all kinds, for what are often unintentional or innocent statutory violations of the BIPA law,” said Durkin.
Illinois has had the BIPA law on the books since 2008. Lawmakers enacted the law to address what they feared at the time could be data breaches that could result if businesses collect fingerprints, retinal scans, facial geometry or other so-called biometric identifiers from customers or employees, and then either go out of business or fail to properly secure the information.
Among other provisions, the law included technical notice-and-consent rules, generally requiring businesses to collect written authorization from customers and employees before collecting their biometric identifying information, and also requiring certain notices concerning how the data would be collected, and how the business might share, store and ultimately destroy fingerprint scans and other digitized biometric information.
Since 2015, however, those notice-and-consent provisions have been cited in thousands of class action lawsuits filed in Cook County courts and elsewhere. Initially, the lawsuits targeted big tech companies, like Facebook and Google.
A class action lawsuit against Facebook over its face-tagging programs, for instance, recently settled in California federal court for $650 million, including a $97 million payday for the plaintiffs’ lawyers.
Other lawsuits continue to target tech firms, such as several such actions filed against facial identity firm Clearview A.I.
However, since the first BIPA actions were filed nearly six years ago, the litigation has morphed primarily into a legal tool to target Illinois employers of all sizes who require employees to scan fingerprints or other biometric identifiers to verify their identities when punching the clock to begin or end work shifts, or when accessing sensitive or secure facilities, such as cash rooms at retail stores or drug closets at hospitals.
Lawsuits have targeted employers of all sizes and types, from small businesses employing fewer than 100 people, to large manufacturers, hospitals and even charities, like the Salvation Army.
Businesses have found few avenues to combat the lawsuits, as well. In 2019, BIPA litigation received a big boost from the Illinois Supreme Court, which ruled that, under that law, plaintiffs do not need to prove they were actually harmed by the biometric data collection to sue their employers or other businesses.
Rather, the courts held the technical violation of the law is sufficient to bring lawsuits, worth hundreds of thousands to potentially even billions of dollars, depending on the size of the company and the scope of the alleged BIPA violations.
Under the law, plaintiffs are allowed to demand damages of $1,000-$5,000 per violation, depending on whether the violation is alleged to be inadvertent or willful. Further, the law has been interpreted to define individual violations as each time a biometric identifier is scanned. For instance, a worker who scans a fingerprint when punching the clock on the job, could account for four or more alleged “violations” every day. When multiplied over a workforce of dozens or even thousands in a five-year span, as allowed under Illinois state law, damages can quickly multiply.
The prospect of facing such massive judgments, plus the refusal of Illinois courts, generally, to recognize all but a few potential legal defenses, employers and timeclock vendors who also have been targeted under the law have begun to settle the cases. Such settlements have ranged from hundreds of thousands of dollars to tens of millions.
“Many of these businesses, especially small businesses, feel as if they are being extorted,” said Durkin. “And many of us agree that they are being unfairly targeted, under what I would call a bastardization of the BIPA statute.”
Illinois Chamber of Commerce President Todd Maisch said his organization estimates more than 1,500 Illinois employers have been targeted by BIPA class action lawsuits, and that number continues to mount, as new class actions are filed in Cook and other Illinois county court systems, and in federal court, nearly every day.
Under the measure being considered in Springfield, many of those BIPA class action lawsuits could be prevented before they can be filed.
Known as House Bill 559, the legislation would rewrite portions of the BIPA law to require workers to notify their employer of BIPA violations before filing suit. The employer would then have 30 days to rectify the technical violations. If they do not, the employee would still be allowed to sue.
The law also would require plaintiffs to prove actual damages for the first time. Technical violations would not be enough to force big payouts from businesses, Durkin said.
He said that reform provision was written specifically to address the Illinois Supreme Court’s finding.
“I talk to our Supreme Court justices regularly, and they tell me, ‘Look, this is how we interpreted the law. If you don’t like it, change the law,’” Durkin said. “So it’s our right as lawmakers to change the law.”
The measure drew support from a host of business organizations, including the state Chamber, the Illinois Manufacturers Association, Illinois Retail Merchants Association and the Illinois Civil Justice League, among others.
Maisch noted that the Illinois Trial Lawyers Association did not speak in opposition to HB559 on Tuesday. However, other progressive organizations have opposed the reforms, including the American Civil Liberties Union. In a statement released March 8, the ACLU asserted HB559 would be used by businesses to “undo” biometric data safeguards.
“This is dream legislation for companies that exist to collect and monetize our information,” said Sapna Khatri, advocacy and policy counsel for the ACLU of Illinois, in the prepared statement. “It removes any meaningful requirement to comply with BIPA. The message is clear – if you cannot comply with the law, just use the legislature to remove the requirement.”
Maisch and Durkin, however, said they believe a bipartisan consensus may have been reached in Springfield to address the perceived abuse of the BIPA law.
Durkin and Maisch noted the proposed reforms do not end the ability of people to sue companies who willfully violate or flaunt the BIPA’s protections.
The measure will head next to the full House of Representatives for a vote. Despite the bipartisan support at the Judiciary Committee, passage of the reforms are no sure thing.
The Illinois House and Senate are controlled by Democratic supermajorities, and Illinois Democrats count trial lawyers among their biggest political donors.
Former House Speaker Michael Madigan, for instance, who reaped millions of dollars in campaign donations from trial lawyers through the years, kept BIPA reform legislation bottled up in committees for the past three years, Durkin noted.
Durkin said he would be working with House Democrats to “expand the bill” in coming days, before it comes back to the floor in late April.
But he said he believes the committee vote signals building support for “the need to give employers some breathing room” and reform use of the BIPA law that “goes against the spirit of the law.”
“With this legislation, we’re bringing some of the balance back to the (BIPA) Act,” said Maisch. “We believe we have a very strong case to make, that this law has been misused, and some type of corrective action is needed.”
Editor's note: The U.S. Chamber Institute for Legal Reform owns the Cook County Record.