After four “contentious” years in court, the parent company of supermarket chain Jewel-Osco has agreed to pay nearly $1.6 million to end a class action lawsuit under Illinois’ stringent biometrics privacy law, which accused the company of improperly requiring Osco workers to scan their fingerprints to verify their identity when accessing pharmacy computers.
Cook County Judge Anna M. Loftus granted preliminary approval to the deal in mid-May. Loftus has scheduled a hearing for Aug. 23 on whether to grant the settlement final approval.
According to a memorandum filed April 28 in Cook County Circuit Court, about 1,600 Osco employees, who accessed the pharmacy’s computers between 2013 and January 2021 would be paid about $977 each.
Andrew C. Ficzko
| stephanzouras.com
That memorandum does not indicate how much attorneys may ultimately request or receive from the settlement. However, in other similar settlements, plaintiffs’ attorneys have typically received about one-third of the funds. In this case, such a fee award would amount to a little more than $500,000, which would be paid before any funds are divided among the members of the class of plaintiffs.
The two sides have been in court since 2018, when attorneys with the firm of Stephan Zouras, of Chicago, filed suit in Cook County court against New Albertson’s Inc, which does business as Jewel-Osco.
The lawsuit was filed on behalf of named plaintiff Gregg Bruhn, an Osco pharmacist.
The lawsuit was similar to thousands of others that have been filed since 2015 under Illinois’ biometrics privacy law, known as the Illinois Biometric Information Privacy Act.
While some of the lawsuits have targeted tech giants, the bulk of the class action litigation has taken aim at Illinois employers. The vast majority of these lawsuits all level similar claims: that employers violated the BIPA law by allegedly requiring workers to scan a fingerprint or other so-called biometric identifier, before the employer first secured written consent from employees, and before supplying employees with allegedly required written notices, explaining how the company would handle and ultimately destroy the scanned fingerprints and other identifying information.
Employers typically require workers to scan their fingerprints to verify their identity when punching the timeclock, or to access a secure system or area in the workplace.
The Stephan Zouras firm has been responsible for a significant share of those thousands of BIPA-related lawsuits filed, including many still pending in Cook County and other Illinois courts.
The lawsuit against Jewel-Osco brought similar claims, accusing the supermarket chain of violating BIPA’s notice and consent provisions when it required pharmacy workers to scan their fingerprints to verify their identity when accessing Osco pharmacy’s computer system.
Also like so many other BIPA lawsuits, the plaintiffs asked the court to order Jewel-Osco to pay damages of $1,000-$5,000 per alleged violation. In court, the law has been interpreted to define individual violations as each time a worker scanned a print.
Thus, given the number of times workers scan their fingerprints each day, the lawsuit could have left Jewel-Osco facing potentially massive damages.
Faced with such risk, Jewel-Osco fought the lawsuit for years. The company tried three times to dismiss the lawsuit. Their defense was notable for challenging the law’s constitutionality. Specifically, Jewel-Osco argued the BIPA law was unconstitutional because it exempted both the state government and financial institutions, like banks, from the law’s stringent requirements.
Jewel-Osco said this exemption should kill the law, as it runs afoul of constitutional prohibitions on special legislation targeting or benefiting only specific individuals or businesses.
Jewel-Osco noted courts and regulators have defined financial institutions to include not just banks, brokerages and credit unions, but also car dealers, property appraisers and career counselors.
The “breadth” of those potentially exempted by the law would also easily stretch to include companies who provide biometric authentication services to financial institutions, even though the BIPA law was specifically was passed in 2008 in reaction to the bankruptcy of Pay By Touch, a company providing biometric authentication services for financial transactions.
Jewel-Osco asserted this exemption essentially turns the BIPA law on its head, excluding the very industry that inspired the BIPA legislation in the first place, and granting a wide array of companies a “unique benefit.”
Courts, however, rejected that argument, forcing the supermarket retailer to try to find some other way to contest the lawsuit.
Jewel-Osco in February 2021 also filed a fourth motion to dismiss, arguing Bruhn’s claims had been filed too late, as they said the lawsuit was filed too late, under state law. Proceedings on that motion have been placed on hold as Illinois courts dealt with key questions that could limit employers' potential exposure under the law.
Across the state, employers have consistently been frustrated in their attempts to mount defenses, or at least reduce the potentially catastrophic damages they might face. Courts have consistently rejected most defenses, notably including companies’ contention that no one has ever actually been harmed by any violation of BIPA’s notice and consent provisions.
Judges, including the Illinois Supreme Court, have instead found the violation is itself the injury under state law, and, to this point, have turned a deaf ear to companies’ contention that the potential damages they face are unfair and crippling, particularly when compared to the lack of harm any of the allegedly injured plaintiffs may have faced from the alleged BIPA violations.
Faced with such steep odds, and weighed against such massive risk, a growing number of employers and other defendants have opted to settle instead. Settlements with employers, to date, have ranged from the hundreds of thousands of dollars to as much as $50 million.
Tech giants Facebook and Google have agreed to settle BIPA claims against them, stemming from their use of facial recognition technology on their photo platforms, famously, for $650 million and $100 million, respectively.
According to the memorandum submitted by the plaintiffs in the Jewel-Osco case, the two sides agreed to the settlement to put an end to the risk and cost of continued litigation, and a potential trial on the merits of the case.
Given the “realities” of the risk and cost yet involved in the case, the plaintiffs said they believed the $1.575 million settlement from Jewel-Osco represented a good result for the plaintiffs and the class, and an opportunity to bring the case to a relatively quick end.
Bruhn and the other plaintiffs have been represented by attorneys Andrew C. Ficzko, Ryan F. Stephan and James B. Zouras, of the Stephan Zouras firm.
New Albertson’s and Jewel-Osco have been represented by attorneys with the firm of Benesch Friedlander Coplan & Aronoff, of Chicago.