Employee timeclock maker Kronos has agreed to pay more than $15 million to settle a sprawling class action lawsuit, accusing the company of violating Illinois’ biometrics privacy law because Kronos allegedly did not live up to its responsibility to secure permission from other companies’ workers before those employers required their workers to use Kronos’ fingerprint-scanning timeclocks.
On Feb. 10, attorneys from the class action law firms of Edelson P.C. and Stephan Zouras, each of Chicago, filed a motion in Chicago federal court, asking a judge to sign off on the deal.
Under the terms of the deal, the Lowell, Massachusetts-based Kronos would pay $15.28 million. Attorneys from the Edelson and Stephan Zouras firms would collect one third of the fund, or about $5.1 million.
The remainder, after other costs are extracted, would be divided among nearly 172,000 potential members of the plaintiffs class. Those would include potentially anyone who in recent years has scanned their fingerprint to verify their identity when punching the clock to begin or end a work shift at an employer using Kronos “biometric employee timekeeping devices.”
According to the motion, individual class members could expect to receive $290-$580 each, depending on how many people submit eligible claims for a cut of the funds.
If the judge signs off on the deal, the settlement would end a legal fight dating back more than three years. The plaintiffs originally filed their lawsuits in Cook County Circuit Court in January 2019. Kronos then removed the cases to federal court, where they were consolidated into a single action for procedural and settlement purposes.
The plaintiffs and Kronos have sparred in federal court periodically in the years since.
The lawsuits, brought under the Illinois Biometric Information Privacy Act, claimed Kronos had obligations under the law to obtain written consent from workers before using the technology to scan their fingerprints and track their work hours. The lawsuits also claim Kronos was required to provide those workers with certain notices required by the law, explaining how their fingerprint scans would be collected, stored, used, shared and ultimately destroyed.
In court, Kronos asserted it bore no such responsibility toward those workers, because the workers were actually employees of other companies. Kronos merely supplied the tech those employers use. So, it should have been the responsibility of those employers to comply with the BIPA law’s notice and consent provisions.
Kronos further argued the lawsuit was “the epitome of gamesmanship” by the plaintiffs’ lawyers. The company noted those lawyers and other class action attorneys were also suing employers to whom Kronos had supplied the timeclocks, looking to collect from two sources on the same claims.
And Kronos has argued the plaintiffs were using the litigation against them as a "fishing expedition," to line up other potential lawsuit targets, including employers to whom Kronos supplied its timeclocks.
U.S. District Judge James Feinerman, however, rejected those arguments, finding Kronos, as the supplier and maintainer of the timeclocks, could still hold just as much responsibility under BIPA as the workers’ actual employers, because the law also governed those who “capture, purchase, receive through trade, or otherwise obtain” the fingerprint scans.
According to the settlement motion, while they continued tussling in court over various legal questions, the parties entered mediation in August 2021, and completed the final settlement agreement in late January 2022.
As Kronos and the plaintiffs continued their court fight, a number of Kronos’ competitors also settled to end BIPA class actions against them.
One of Kronos’ leading rivals, ADP, agreed to pay $25 million to settle the BIPA class action against them. In that deal, the Edelson and Stephan Zouras firms, along with another firm, also collected $8.75 million in fees.
Timeclock maker Novatime agreed to pay $14 million. Competitor Paychex agreed to pay $3.4 million.
And Timeclock Plus agreed to settle claims against it for $600,000.
Should the cases have proceeded to trial, the timeclock vendors could have faced massive potential liabilities.
Under Illinois’ unique biometrics law, plaintiffs are allowed to demand statutory damages of $1,000 or $5,000 per violation. Courts have interpreted the BIPA law to define individual violations as each time a biometric identifier is scanned. In the case of class actions over biometric timeclocks, this could mean the timeclock vendors could be on the hook for $1,000 or $5,000 for each time one of their customers’ workers scanned a fingerprint on their timeclocks.
Across a class of more than 171,000 people over years, the potential liability risk facing Kronos could have easily soared into the billions of dollars, if a jury had ruled in favor of the plaintiffs.
The plaintiffs noted the settlement should still be considered substantial, however, as the court had still reserved for Kronos the opportunity to argue later in the litigation, if necessary, that, while Kronos’ customers’ employees had not given express consent, they had given implied consent by continuing to use the devices without question.
The plaintiffs noted this inserted some uncertainty into future proceedings, if the case were to continue and not be settled.
Kronos has been represented by attorneys Melissa A. Siebert, Erin Bolan Hines and Maveric Ray Searle, of Shook Hardy & Bacon, of Chicago; and Debra Bernard, of Perkins Coie, of Chicago.
The plaintiffs’ action has been led by attorneys James B. Zouras, Ryan F. Stephan, Andrew C. Ficzko and Haley R. Jenkins, of Stephan Zouras; and Jay Edelson, Benjamin H. Richman, J. Eli Wade-Scott and Schuyler Ufkes, of the Edelson firm.
The judge has not yet granted preliminary approval to the settlement request.