Human resources vendor Ceridian appears headed toward a $3.5 million settlement to end a class action lawsuit accusing it of violating a state biometrics privacy law.
In May, Cook County Circuit Judge Raymond Mitchell granted preliminary approval of the settlement deal, which included letting potential class member until Sept. 30 to submit claims. Attorneys with the Chicago firm Edelson PC and Naperville’s Fish Potter Bolaños filed a motion Sept. 22 seeking final approval of the settlement.
According to that filing, Ceridian HCM sells a cloud-based timeclock system that uses a fingerprint scanner. LaBarre, who sued in May 2019, alleged the company violated the Illinois Biometric Information Privacy Act by storing data without consent and failing to create a data retention and destruction policy. She said she used a Ceridian timeclock device at a Standard Market grocery store in Chicago’s western suburbs from 2018-2019.
The motion for final approval said the settlement class includes 14,142 people who used a Ceridian fingerprint timeclock in Illinois from May 18, 2014, through May 17, 2022. Members will split a $3.5 million fund, prorated among those whose claims are approved.
The law firms representing named plaintiff Rachel LaBarre asked Mitchell to approve them splitting 35% of the overall fund, which works out to about $1.23 million.
What ends up being left for class members “represents the highest monetary relief per-person in a vendor BIPA case to date,” according to the motion, distinguishing this action from those that directly target an employer. The attorneys further said 22% of class members had submitted claims as of 10 days before the deadline, which should leave each claimant with about $700 after deduction of fees and costs.
“Although part of a growing trend of increased participation,” the motion stated, “this far exceeds historical claims rates in consumer class actions, which rarely see rates in the double digits.”
In addition to the payout, Ceridian also agreed to maintain a public data retention and deletion plan, already on its corporate website, as well as to establish a process for its customers to secure informed, written consent from their employees before they begin scanning fingerprints. That process will be integrated with on-screen instructions for Ceridian’s Dayforce timeclock system.
The motion for final approval detailed the litigation history since early 2019, which included several attempts by Ceridian to strike class allegations and dismiss the complaint. At one point, Ceridian answered LaBarre’s amended complaint by denying her material allegations and offering 22 affirmative defenses. Settlement discussions began during discovery.
LaBarre’s team said recovery could have been significantly limited if settlement or trial happened after an expected Illinois Supreme Court opinion establishing whether the type of BIPA violations she brought have a one- or five-year statutory limitation. The motion also noted Ceridian likely would’ve followed other BIPA defendants and argued fingerprint scans don’t meet the law’s definition of biometric information or identifiers.
Had the plaintiffs prevailed at trial, LaBarre’s attorneys said, Ceridian might have to pay at least $28 million.
As part of the settlement terms, class members retained the right to pursue BIPA claims against employers. This contrasts with other litigation where plaintiffs sued employers and vendors jointly and have been “forced to release the third-party vendor for nothing,” according to the motion.
The settlement comes after other human resources vendors, including ADP and Kronos, among several others, agreed to also settle third-party vendor class action claims, also for millions of dollars.
Only one person filed a formal settlement objection, but Ceridian reviewed its record and determined the objector shouldn’t be a class member — the four employers the objector listed weren’t Ceridian customers during the relevant time periods — while the settlement administrator couldn’t find a matching name or address on the class list.
Plaintiffs have been represented in the case by attorneys Jay Edelson, J. Eli Wade-Scott and Schuyler Ufkes of the firm of Edelson PC, of Chicago, and David Fish, of Fish Potter Bolaños, of Naperville.
Ceridian has been represented by attorney Molly K. McGinley, of K&L Gates, of Chicago.