Illinois Appellate Court Rules That Workers' Compensation Act Does Not Bar BIPA Claims

In its Sept. 18, 2020, opinion in McDonald v. Symphony Bronzeville Park LLC, 2020 IL App (1st) 192398, the Illinois Appellate Court struck down a key defense pursued by employers facing lawsuits for violation of the Illinois Biometric Information Privacy Act, 740 ILCS 14/1 et seq. (BIPA). Over the past few years, employers using fingerprint-based time clocks and other technology capturing an employee's biometric information have become a major target of class action lawsuits alleging violations of BIPA. One of the primary defenses raised by employers – that BIPA is preempted by the Illinois Workers' Compensation Act (Compensation Act) – was explicitly rejected by the court in McDonald.

The Illinois Biometric Information Privacy Act

BIPA prohibits private entities from collecting or using an individual's biometric information (specifically, retina scans, iris scans, fingerprints, voiceprints, or scan of hand or face geometry) without first providing written notice to the individual that biometric information is being collected and obtaining the individual's written consent. Any entity that collects biometric data is also required to develop a written policy available to the public that sets forth a retention schedule and guidelines for the destruction of biometric information. An entity that violates BIPA may be liable for damages of $1,000 for each negligent violation; or $5,000 for each reckless or intentional violation; and attorneys' fees and costs.

The McDonald Decision

The plaintiff in the underlying class action lawsuit alleged that defendant-employer Symphony Bronzeville Park LLC violated BIPA by requiring the plaintiff and other employees to use a time clock system that scans their fingerprints without properly providing notice, providing a publicly available retention policy, or obtaining a written release from the employees. The defendants moved to dismiss the complaint arguing that the plaintiff's BIPA claims were barred by the exclusivity provisions of the Compensation Act, which provides the exclusive remedy for employees to recover from employers for work-related injuries. The trial court denied the motion to dismiss but certified the question for appeal as to whether the exclusivity provisions of the Compensation Act bar a claim for statutory damages under BIPA.

The Appellate Court addressed a narrow question regarding the interplay between the Compensation Act and BIPA. The court noted that the Compensation Act generally provides the exclusive remedy for work-related injuries, and that employees cannot recover for common law or statutory damages outside of the Compensation Act. However, the court recognized that there are four exceptions to the exclusivity provisions of the Compensation Act: 1) if the injury was not accidental; 2) if the injury did not arise from employment; 3) if the injury did not occur during the course of employment; or 4) if the injury is not compensable under the Compensation Act. Thus, the issue before the Appellate Court was whether a claim for statutory damages under BIPA fell within one of the exceptions to the Compensation Act.

The Appellate Court focused on fourth exception exclusively, considering whether a claim for statutory damages under BIPA is compensable under the Compensation Act. The court concluded that a BIPA claim limited to statutory damages is not an injury that is compensable under the Compensation Act. Thus, the plaintiffs' claims fell under the fourth exception to the Compensation Act and were not preempted.

The court's reasoning relied heavily on the Illinois Supreme Court's opinion in Rosenbach v. Six Flags Entertainment Corp., 2019 IL 123186, in which the state Supreme Court held that an individual is entitled to damages for BIPA violations even if the individual does not suffer actual harm. The Appellate Court in McDonald found that because actual harm is not required for a statutory damages claim under BIPA, such a claim does not "fit[] within the purview of the Compensation Act, which is a remedial statute designed to provide financial protection for workers that have sustained an actual injury." The court ruled that the exclusivity provisions of the Compensation Act do not bar a claim for statutory damages under BIPA. The court also noted that its decision was in line with federal courts and Illinois circuit courts that have generally considered the same issue.

Notably, the Appellate Court refused to address the question of whether the Compensation Act would preempt a claim for actual damages alleged by a plaintiff as opposed to purely statutory damages for a technical violation of BIPA. Thus, preemption via the Compensation Act may still be a viable defense where plaintiffs claim personal damages beyond the statutory fines imposed by BIPA.

Conclusion

The preemption defense was a significant aspect of employers' efforts to reduce potential liability in BIPA lawsuits. The court's ruling in McDonald further narrows the viable defenses to alleged violations of BIPA, but does not eliminate the applicability of preemption in circumstances where actual damages are alleged.

Holland & Knight has a litigation team dedicated to defending BIPA lawsuits that is pursuing novel defenses as well as tracking impactful court decisions and settlement trends. Holland & Knight's BIPA team focuses on preventative consultation prior to litigation, creative resolution early in litigation and reducing potential liability. If you have any questions regarding the court's decision or BIPA litigation, please contact the authors or Partner Mark Melodia, chair of Holland & Knight's Data Strategy, Security & Privacy Team.

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem. Moreover, the laws of each jurisdiction are different and are constantly changing. If you have specific questions regarding a particular fact situation, we urge you to consult competent legal counsel.