The Illinois Supreme Court has thrown a rare brake on the ability of workers and trial lawyers to target employers with potentially massive payout demands through class actions brought under Illinois’ stringent biometrics privacy law, as the high court declared employers can use federal labor law to block unionized workers from suing them over required worker fingerprint scans.
On March 23, the Illinois Supreme Court ruled unanimously that a class action lawsuit against Roosevelt University in Chicago under the Illinois Biometric Information Privacy Act can be shut down under a “broad management rights clause” contained within the union workers’ collective bargaining agreement (CBA).
The opinion was authored by Illinois Supreme Court Justice Lisa Holder-White. All of the court’s six other justices joined in the decision.
James Zouras
| Stephan Zouras LLP
“Given the language in the CBA and (federal labor law), it is both logical and reasonable to conclude any dispute must be resolved according to federal law and the agreement between the parties,” Holder-White wrote.
The decision keeps intact one of the largest legal shields established by courts, to date, against the barrage of class action lawsuits under the BIPA law.
Since about 2015, thousands of employers throughout Illinois, of many different types and sizes, have been targeted by BIPA-related class action lawsuits.
The lawsuits have generally accused employers of improperly requiring workers to scan a fingerprint or other so-called biometric identifier to verify their identities when punching the clock during their work shifts, or when accessing secured areas within a workplace. The lawsuits assert the workers should have been required to first obtain written consent from workers, and to supply workers with notices concerning how their scanned biometric data may be stored, shared and destroyed.
The financial risks faced by employers from the lawsuits are steep. Under the law, plaintiffs are allowed to demand damages of $1,000 or $5,000 per violation. The Illinois Supreme Court recently ruled those damages can be assessed based on each time a worker’s fingerprint is scanned, not merely per employee. And the Supreme Court said plaintiffs can demand those damages over a period dating back up to five years.
When multiplied across an entire workforce, potential damages can quickly climb into the many millions or even billions of dollars – amounts that judges and business advocates alike have called “absurd” and “catastrophic,” potentially threatening to annihilate businesses targeted by such actions.
Fast food chain White Castle, for instance, has estimated it could face court-ordered damages of $17 billion under the state Supreme Court’s holdings, should the case against it proceed to trial.
Further adding to employers’ legal risk, courts, including the Illinois Supreme Court, have routinely shot down most of the legal defenses employers have attempt to mount against the lawsuits. Notably, the Illinois Supreme Court ruled in 2019 that BIPA plaintiffs don’t need to prove they were ever actually harmed by identity theft or a data breach or other actual injury, opening the gates to a flood of new class actions, which critics have derided as “gotcha” lawsuits.
Faced with such massive risk, a growing number of employers and other defendants targeted by BIPA suits have opted to settle, rather than taking their chances in court. Settlements from employers have generally ranged from hundreds of thousands of dollars to as much as $50 million.
It remains unclear what effect the recent Illinois Supreme Court decisions may have on future settlements.
A notable exception, however, have been lawsuits brought by workers who are represented in their workplaces by unions.
Several federal judges, including judges at the U.S. Seventh Circuit Court of Appeals, have determined federal labor laws may prohibit individual workers from bringing individual lawsuits or class actions against their employers over allegedly improper required fingerprint scans.
Those holdings were challenged in a class action lawsuit brought against Roosevelt University by William Walton, who worked in Roosevelt’s campus safety office. Represented by attorneys with the Chicago firm of Stephan Zouras, Walton claimed the university wrongly required him and other workers to scan their fingerprints without notice or consent, as allegedly required by BIPA.
Roosevelt University said Walton’s suit should be disallowed, because he and others in his work unit are represented by the Service Employees International Union, so his collective bargaining agreement governs timeclock rules in the workplace.
Cook County Judge Anna Helen Demacopoulos sided with Walton, who had determined the rights to sue under BIPA existed apart from the conditions of employment negotiated by a union under a CBA.
But a state appeals panel reached the same conclusion as the federal courts, ruling unionized workers’ employment-related BIPA claims belong before an arbitrator, to be evaluated under the workers’ union contract, and not in a court of law.
The state appeals panel determined such class actions, by unionized workers against their employers under BIPA, amount to an attempt by workers to bypass their union in a bid to secure a potentially substantial personal payday from their employer.
If workers have elected to allow their union to represent them in all employment issues, they cannot then also choose to essentially represent themselves to bring a lawsuit under BIPA.
The Illinois Supreme Court took up the case to deliver a final say on the matter.
Walton and supporters from activist labor organizations argued the decisions in favor of federal preemption essentially allow employers to use federal labor law and their negotiated contract to “immunize” them from lawsuits over allegedly illegal conduct.
They again asserted Walton’s lawsuit stood apart from the terms of employment negotiated by the SEIU.
The state high court, however, agreed federal labor laws may not allow union workers to sue their employers under BIPA.
In the opinion, Justice Holder-White said the state high court did not disagree with the federal court decisions, which determined federal labor law should hold sway in relations between employers and their unionized workers.
The federal judges, Holder-White said, “ultimately determined that when an employer invokes a broad management-rights clause from a CBA in response to a Privacy Act claim, the claim is preempted because it is up to an arbitrator to determine ‘ whether the employer properly obtained the union’s consent.’”
The Supreme Court, Holder-White said, did not find such rulings “to be without logic or reason.”
“Accordingly, because we do not believe the federal decisions were wrongly decided, and here the CBA contained a broad management rights clause, we find Walton’s Privacy Act claims are preempted by” federal law, Holder-White said.
Roosevelt University has been represented by attorneys David M. Schultz, John P. Ryan and Louis J. Manetti Jr., of the firm of Hinshaw & Culbertson, of Chicago.
Walton was represented by attorneys Ryan F. Stephan, James B. Zouras and Haley R. Jenkins, of the firm of Stephan Zouras, of Chicago.