A federal appeals panel has denied an attempt by plaintiffs’ lawyers to use arbitration to allow unionized workers to sidestep prior court rulings and press legal claims directly against their employers over worker fingerprint scans, when judges have ruled such claims aren’t allowed under collective bargaining laws.
On Sept. 20, a three-judge panel of the U.S. Seventh Circuit Court of Appeals ruled in favor of Kerry Inc., a Morton Grove-based maker of international food products and flavorings, in a dispute with some of its workers.
The legal dispute dates back to 2017, when attorneys with the firm of Caffarelli & Associates, of Chicago, filed suit in Cook County Circuit Court against Kerry, on behalf of a group of Kerry employees.
The lawsuit accuses Kerry of improperly requiring workers to scan their fingerprints to verify their identity when using the company’s biometric timeclocks to punch in and out of work shifts. The lawsuit specifically accused Kerry of requiring the fingerprint scans allegedly without first securing written consent from the workers, and allegedly without providing workers certain notices concerning why the company required the fingerprint scans, and how the company would handle and ultimately destroy the scanned fingerprints.
The lawsuit asserted the company’s alleged actions violated the Illinois Biometric Information Protection Act (BIPA).
The class action was similar to hundreds of class actions filed in recent years in Cook County and other courts in Illinois under BIPA against employers of many different types and sizes, accusing those employers of allegedly violating BIPA’s technical requirements.
However, the lawsuits carry steep financial risk for the targeted employers. Under the law, plaintiffs are allowed to demand damages of $1,000-$5,000 per violation. Courts have interpreted the law to define individual violations in such cases as each time a worker scans a fingerprint. Such interpretation could put employers on the hook for big payouts. Employers and business advocates have described the potential judgments as “crippling” and “bankrupting,” and have told judges there are “billions of dollars at stake for Illinois employers” in such cases.
While many employers have struggled to find ways to blunt the class actions, some employers whose workers are represented by labor unions have met with success using federal labor laws.
Judges have ruled the BIPA claims, because they involve alleged violations committed in the course of employment, can fall under the terms of collective bargaining agreements. The manner in which employees punch the clock and track their work hours should be a matter for negotiation between the employer and the workers’ union.
In late 2020, U.S. District Judge Franklin U. Valderrama dismissed the lawsuit against Kerry, similarly finding the workers’ CBA controlled their claims, barring them from continuing their lawsuit.
The plaintiffs ultimately appealed to the Seventh Circuit. They argued the matter should be sent to arbitration.
The federal appeals panel, however, said they believed the same federal labor law that prevents unionized workers from directly negotiating with their employer over their work conditions, and prohibits BIPA lawsuits by unionized workers against an employer, also should be read to prevent workers from using arbitration to press individual BIPA claims against their employer.
The appeals panel said the labor law doesn’t allow the courts to “usurp the union’s authority to decide” if BIPA claims represent a workplace grievance, or whether that grievance requires arbitration.
In this case, they noted, the union representing the workers has not requested arbitration concerning the fingerprint scanning timeclocks, which have been used at Kerry’s facility since 2011.
The decision was authored by Seventh Circuit Judge Frank Easterbrook; Chief Judge Diane Sykes and Michael B. Brennan concurred.
Kerry has been represented by attorneys Melissa A. Siebert, Erin Bolan Hines and Jonathon M. Studer, of the firm of Shook Hardy & Bacon, of Chicago.