By Jennifer A. Riley, Alex W. Karasik and Tyler Z. Zmick

Seyfarth Synopsis:  In Sosa v. Onfido, Inc., No. 20-CV-4247, 2022 U.S. Dist. LEXIS 74672 (N.D. Ill. Apr. 25, 2022), the Court issued the latest plaintiff-friendly decision under the Illinois Biometric Information Privacy Act (“BIPA”), putting businesses and employers on notice that the statute can apply to photographs in addition to the typically-alleged facial and hand scans.  The Court denied the Defendant’s motion to dismiss on the basis that: (1) photographs and information derived from photographs are protected by BIPA; (2) Plaintiff sufficiently plead a claim for liquidated damages; and (3) the BIPA does not violate the First Amendment. 

Case Background

Plaintiff filed suit alleging that the Defendant markets and sells proprietary facial recognition software that is used by online businesses to verify consumers’ identities.  Id. at *2.  To verify a consumer’s identity, the consumer first uploads a copy of his or her identification and a facial photograph.  Id.  The software then scans the identification and photograph to locate the facial images on each document; extracts a unique numerical representation of the shape or geometry of each facial image, which is often called a ‘faceprint,” compares the faceprints from the consumer’s identification and photograph; and generates a score based on the similarity of the faceprints.  Id.  The software also can compare the faceprints obtained from a consumer’s identification or photograph with other biometric data in Defendant’s database, such as the biometric data of known masks or other consumers’ photographs.  Id. at *2-3.  Online businesses can integrate the software into their products and mobile apps in such a way that consumers seeking to verify their identities likely do not know that they are interacting with and providing their sensitive information to Defendant, a third party.  Id. at *3.

Plaintiff was a member of an online marketplace that partnered with Defendant to verify its users’ identities using Defendant’s software.  Id.  Plaintiff claimed that, in April 2020, Plaintiff verified his identity in the online marketplace and that Defendant allegedly used its software to scan Plaintiff’s face, extract his faceprints, compare the two photographs, and then Defendant kept his unique faceprint in a database and accessed it every time another person used Defendant’s verification process.  Defendant purportedly did not inform Plaintiff that it would collect, store, or use his biometric identifiers derived from his face,” and Plaintiff never signed a written release allowing Defendant to do so.  Id. at *3-4.

Plaintiff filed suit against Defendant in the Circuit Court of Cook County, Illinois, alleging that it violated the BIPA, 740 Ill. Comp. Stat. 14/1 et seq., seeking to represent himself and a putative class of Illinois residents “who had their biometric identifiers or biometric information, including faceprints, collected, captured, received, otherwise obtained, or disclosed by Defendant while residing in Illinois.”  Id. at *4.  Defendant removed the lawsuit based on diversity jurisdiction and the Class Action Fairness Act (“CAFA”).  Id. at *5.  After the Court denied Defendant’s motion to compel arbitration (and the Seventh Circuit affirmed), Defendant moved to dismiss on the grounds that: (1) Plaintiff did not state a viable claim under the BIPA because the information Defendant allegedly collected — photographs and information derived from photographs — is not protected by the BIPA; (2) Plaintiff failed to adequately state a claim for liquidated damages; and (3) the BIPA violates the First Amendment.

The Court’s Decision

The Court denied Defendant’s motion to dismiss on all three grounds.

The BIPA’s Application To Data Derived from Photographs

The Court first addressed the argument that Plaintiff failed to state a claim under the BIPA because Defendant’s software captured information from user-submitted photographs, and neither photographs nor information derived from photographs are covered by the BIPA.  The Court’s analysis turned on Section 10 of the BIPA, which defines “biometric information” and “biometric identifier” and also lists items that do not fall under those definitions — specifically, “biometric identifiers do not include photographs, and biometric information ‘does not include information derived from items or procedures excluded under the definition of biometric identifiers.’”  Mem. Op. & Order at 11 (quoting 740 ILCS 14/10).  The Court acknowledged that data derived from photographs is not “biometric information,” but it held that data derived from photographs in the form of “scans of face geometry” can constitute biometric identifiers.  Id. at 11-12 (“As alleged . . ., [defendant’s] software scans identification cards and photographs to locate facial images and extracts a unique numerical representation of the shape or geometry of each facial image, which [plaintiff] refers to as a ‘faceprint.’  The faceprints extracted by [defendant] plausibly constitute scans of face geometry and, therefore, ‘biometric identifiers’ under BIPA.”) (internal citations omitted).

The Court rejected the argument that the data cannot be a “scan of face geometry” because it did not involve the scan of plaintiff’s “actual face, but rather, a scan of a photograph of his face,” holding that “[n]othing in the BIPA’s text . . . supports [defendant’s] contention that a scan of face geometry must be an ‘in person’ scan.”  Id. at 14 (citation omitted).

Request For Liquidated Damages

The Court next turned to Defendant’s argument that Plaintiff’s request for liquidated damages should be dismissed because he failed to allege facts from which it reasonably could be inferred that Defendant negligently, recklessly, or intentionally violated BIPA.  The court held that Plaintiff need not plead Defendant’s state of mind to allege a BIPA claim and that dismissing Plaintiff’s request for liquidated damages was unwarranted because the request sought a particular remedy (which is “distinct from [plaintiff’s] underlying claim for relief based on BIPA”).  Id. at 18.

BIPA authorizes a prevailing party to recover, inter alia, the greater of actual damages or $1,000 in liquidated damages for each negligent BIPA violation and the greater of actual damages or $5,000 in liquidated damages for each intentional or reckless BIPA violation.  740 ILCS 14/20(1), (2).  Importantly, Plaintiff sought not only liquidated damages but also injunctive relief and relief in the form of reasonable attorneys’ fees, costs, and expenses — the latter forms of relief having no associated mental state requirement.  See Mem. Op. & Order at 19-20 (“Nor does [plaintiff] need to allege facts suggesting any level of culpability to plausibly state a BIPA claim in the first place,” as “[Plaintiff] may obtain injunctive relief or attorneys’ fees — as he has requested — regardless of whether [Defendant’s] actions are proven to be negligent, reckless, or intentional.”).

First Amendment

Finally, the Court addressed the argument that BIPA Section 15(b) — which requires a private entity to obtain informed consent before collecting an individual’s biometric data — violates the First Amendment as applied by restricting Defendant’s speech and its collection of “ information voluntarily provided by consumers to identify themselves as marketplace users.”  Id. at 24.  The court held that (1) Section 15(b) does not restrict defendant’s speech (meaning the First Amendment does not apply), and (2) even if Section 15(b) restricted defendant’s speech, it is a content-neutral restriction that survives the applicable level of First Amendment scrutiny (i.e., intermediate scrutiny).

In holding that Section 15(b) does not regulate Defendant’s speech, the Court reasoned that Section 15(b) “does not prohibit or otherwise restrict what a private entity may do with an individual’s biometric data once the data is obtained”; instead, Section 15(b) “regulates [D]efendant’s ability to obtain an individual’s biometric data by requiring [Defendant] to acquire the individual’s informed consent before doing so.”  Mem. Op. & Order at 24.  The Court relied on Dahlstrom v. Sun-Times Media, LLC, 777 F.3d 937 (7th Cir. 2015), where the Seventh Circuit held that the Driver’s Privacy Protection Act’s (the “DPPA”) “prohibition on obtaining information from driving records” did not restrict speech because it limited only “access to information.”  Mem. Op. & Order at 24 (citation omitted).  Sosa reasoned that “[l]ike the DPPA provision at issue in Dahlstrom, Section 15(b) burdens a party’s ability to access certain information.”  Id. at 25.

The Court further held that, even if Section 15(b) restricted Defendant’s speech, it would nonetheless survive intermediate scrutiny under the First Amendment.  The Court applied the four-prong intermediate scrutiny test set forth in Central Hudson Gas & Electric Corp. v. Public Service Commission of New York, 447 U.S. 557 (1980): [1] First, courts ask whether the commercial speech concerns unlawful activity or is misleading (if so, the speech is not protected by the First Amendment); [2] if the speech concerns lawful activity and is not misleading, courts next ask whether the asserted governmental interest is substantial; [3] if it is, then courts determine whether the regulation directly advances the governmental interest asserted; and [4] finally, courts ask whether the regulation is more extensive than necessary to serve that interest.

Regarding the first step, the Court held that the at-issue commercial speech does not concern unlawful activity and is not misleading because Section 15(b) “regulates both the misleading and non-misleading collection of biometric data.”  Mem. Op. & Order at 31.  But the Court held that Section 15(b) passes muster under steps (2) through (4).  At the second step, the Court determined that Section 15(b) is supported by a substantial governmental interest — namely, the interest in protecting consumers’ rights to privacy in and control over their biometric data.  At the third step, the Court held that Section 15(b) directly advances the government’s interest because the harms identified by the Illinois legislature are real and Section 15(b) alleviates those harms “to a material degree.”  Id. at 33.  Finally, the court held that Section 15(b) is not more extensive than necessary to serve the government’s interest, as: (1) Section 15(b) “does not outright prohibit companies . . . from obtaining biometric data; it merely requires them to obtain informed consent before doing so”; and (2) “it is not too onerous to require a company that wants to collect a consumer’s sensitive and immutable biometric data to obtain the consumer’s consent before doing so.”  Id. at 35.

Conclusion

Sosa is one of several recent plaintiff-friendly BIPA decisions, and it reinforces the unanimous interpretation among courts to date that the BIPA can apply to data derived from photographs.  The Sosa decision also seemingly tends to undermine the defense argument that a BIPA plaintiff must allege facts demonstrating negligence, recklessness, or intent to state a claim and request liquidated damages under the statute.

Significant questions remain, however, regarding the BIPA’s application to companies that collect biometric information.  For one, the Court’s First Amendment analysis regarding Section 15(b) suggested that the same analysis might lead to the conclusion that claims brought under Sections 15(c) and/or 15(d) (which prohibit (i) profiting from biometric data and (ii) disclosing biometric data without consent, respectively) do violate the First Amendment.  See Mem. Op. & Order at 27 (noting that statutory provisions restricting the sale, disclosure, and use of information “undoubtedly restrict[] speech”).  Other important questions will be decided in appeals pending before the Illinois Supreme Court, including the question whether claims asserted under Sections 15(b) and 15(d) accrue only once upon the initial collection or disclosure of biometric information, or each time a private entity collects or discloses biometric information (see here), and the limitations period applicable to BIPA claims.

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By Gerald L. Maatman, Jr., Christopher J. DeGroff, Alex W. Karasik, and Sarah K. Bauman

Seyfarth Synopsis:  On March 28, 2022, the EEOC released its fiscal year 2023 budget justification (see here) and fiscal year 2021 performance report (“APR”) (see here).  The APR is a “report card” analysis of the EEOC’s litigation goals and performance results from FY 2021, while the FY 2023 budget outlines how the Commission intends to allocate funds in order to effectuate those goals, in the context of its proposed FY 2023 budget of $464,650,000.

These publications are exceedingly important to employers, as they contain must-read data points for employers in regards to the EEOC’s future strategic objectives and potential targets of heightened enforcement activity.

FY 2021 APR

 In the APR, the EEOC declared that FY 2021 was a successful year for the Commission in terms of advancing its strategic objectives.  In touting its achievements, the EEOC secured more than $485 million in monetary relief for over 15,000 alleged victims of employment discrimination, resolved 138 merit lawsuits, achieved a “favorable result” in 95.7% of all district court resolutions, and secured a reduction of 9.1% in the aged inventory in federal sector appellate cases.

The EEOC often uses this report to undergird its requests for budget increases and to document its achievement. By comparison, the EEOC recovered $535.5 million in FY 2020, $486 million in FY 2019, and $505 million in FY 2018.

The EEOC also continued its goals in community outreach, education, and technical assistance by – despite the challenges of the pandemic – conducting 460 outreach events and reaching 27,495 small business representatives.  Commissioner Burrows, the Chair of the EEOC, remarked that the success of 2021 was made possible “through efforts to rebuild and strengthen the agency,” as it was “fortunate to hire more than 450 predominately front-line positions to begin replacing staff departures in recent years, thereby strengthening our ability to fulfill the agency’s vital role in preventing and remedying employment discrimination.”

FY 2023 Budget Justification

Moving into 2023, the EEOC justifies its $464,650,000 budget request — a whopping $60.160 million increase from last year — based on advancing the strategic priorities for the fiscal year.  Commissioner Burrows indicated that such priorities correlate with the Biden Administration’s call for a “whole-of-government approach to addressing systemic discrimination and advancing equal opportunity.”  Having a “critical role in achieving that agenda,” the EEOC plans to focus on “three broad areas,” including racial justice and systemic discrimination of all protected bases, pay equity, and the civil rights impact of the COVID-19 pandemic.  Of that $464,650,000, the EEOC requested $31.5 million for state, local, and tribal programs.

Commissioner Burrows further indicated that the proposed budget also will help advance three initiatives launched in 2021, including the Hiring Initiative to Reimagine Equity (HIRE), which aims to expand employment opportunities as the nation recovers from the pandemic; a joint anti-retaliation initiative with the U.S. Department of Labor and the National Labor Relations Board; and an initiative to ensure that employment-related artificial intelligence and algorithmic decision-making tools comply with federal civil rights laws.

Implications For Employers

FY 2021 was a year of change and recovery at the EEOC as a result of the pandemic and new leadership.  Now that the new leadership regime and their structural changes settled in and adapted to a country that remains impacted by the lingering global pandemic, companies find themselves facing continued uncertainty in the employment landscape.  Given that the EEOC will be equipped with a vastly increased proposed budget, it is more crucial than ever for employers to take heed in regards to the EEOC’s strategic priorities and enforcement agendas.

We will continue to monitor these changes closely and keep readers informed of any further developments as we continue into this new year.

By Gerald L. Maatman, Jr., Jennifer A. Riley, and Sarah K. Bauman

Seyfarth Synopsis: In Allen et al. v. AT&T Mobility Services, LLC, Case No. 1:18-CV-03730 (N. D. Ga. March 21, 2022), Plaintiffs alleged that AT&T, their former employer, discriminated against them and other pregnant sales associates with how it designed and implemented its attendance policies and related discipline system.  Plaintiffs filed suit seeking damages and an injunction against these practices pursuant to Title VII of the Civil Rights Act of 1964 (“Title VII”), as amended by the Pregnancy Discrimination Act (“PDA”), 42 U.S.C. 2000e et seq.  Plaintiffs brought a motion for class certification, which the Court denied on the basis that individualized inquiries were necessary to determine whether AT&T’s policies caused harm and/or damaged any potential Plaintiff, such that resolution of their claims on a class-basis would be impractical.  This case is a must-read for employers facing class action discrimination claims and another addition to the emerging and developing law of pregnancy discrimination. 

Case Background

In Allen, the named Plaintiffs filed a putative class action alleging that AT&T discriminates against its non-managerial pregnant employees by implementing an absence policy (“SAG”) that disparately impacted such employees.  Id. at 3.  Under the SAG, unexcused absences garnered points, and discipline would follow from the imposition of those points.  After accruing three to four points, retail workers become subject to progressive disciplinary action.  The SAG and associated discipline policies operated without discretion to ensure consistency in attendance and discipline practices in all AT&T retail stores nationwide.  Id.

Not all absences accrue points.  The SAG policy delineates 13 categories of “excused” absences, such as leave under the Family and Medical Leave Act (“FMLA”), military leave, approved short term disability, and approved job accommodations.  Id. at 5.  Employees must request time off through an app at least one hour prior to their scheduled shift.  The app requires employees to select a reason for the absence from various options, none of which include pregnancy.  Id. at 6.

Employees may request excused absences due to their pregnancy or pregnancy-related conditions under the FMLA, and short term disability or approved job accommodations.  While the FMLA includes incapacity due to pregnancy and prenatal care, it also requires employees to have worked at least 1,250 hours of service.  Further, under AT&T’s short term disability policy, employees are required to submit their claims, including medical evidence, to a third-party for consideration and the policy does not cover medical conditions that do not rise to the level of a disability.  The same limitations apply to approved job accommodations leave, which is available only to those with disabling conditions.  Id.  Thus, the essence of Plaintiffs’ claims was that AT&T disproportionately burdens pregnant employees compared to other employees to establish a basis for an excused absence.  Id. at 7.

The Court’s Decision

The Court denied Plaintiffs’ motion for class certification.  In addressing the four requirements of Rule 23(a) — numerosity, commonality, typicality, and adequacy — the Court concluded that each were satisfied.  Id. at 12-19.  The Court held that Plaintiffs established a common policy at issue, reduced to writing and centrally administered — the SAG — and identified common questions that were central to the case, such as whether the SAG has a disparate impact on pregnant workers, in that it disproportionately imposes discipline.  The Court also held that the typicality requirement was satisfied, since Plaintiffs’ claims arose from the same course of conduct underlying the class claims — the SAG — pursuant to which pregnant workers were treated differently.

The Court rejected AT&T’s arguments to the contrary, including that Plaintiffs were not typical because they “knew how to obtain excuses for a pregnancy-related absence under the SAG, but merely ‘failed to act on that knowledge.’”  Id. at 20.  The Court explained “[b]ut Plaintiffs’ claims are that they were unable to successfully obtain excused absences and received discipline,” and “[t]hese asserted experiences with the SAG policy are allegedly typical of the experiences of the pregnant employees they seek to represent.”  Id.  The Court further held that the adequacy requirement was similarly satisfied — Plaintiffs “submitted evidence that support their contention that their unexcused absences were pregnancy-related, and that it is sufficient to meet their burden at the class certification stage.”  Id. at 22.

The Court further analyzed whether the case could be certified under Rule 23(b)(3) or alternatively, Rule 23(c)(4).  The Court held that Plaintiffs failed to demonstrate under the “far more demanding” predominance inquiry that the questions of law or fact common to class members predominated over any questions affecting only individual members.  Id. at 23-24.  The Court found that individualized issues — including whether a class member was absent from work; whether the absence was caused by an inability to come to work; whether that inability was pregnancy-related; and whether the employee informed or attempted to inform AT&T of that inability; and whether the employee sought an excuse for the absence —  predominated in this case.  Further, resolving the issue that the assessment of points even without a termination is an adverse employment action because points may limit the availability of transfers or promotions for a class member would “necessarily require the Court to assess facts and circumstances unique to each individual in the class.”  Id. at 25.

Regarding Rule 23(c)(4), which states that “[w]hen appropriate, an action may be brought or maintained as a class action with respect to particular issues,” the Court agreed with AT&T’s position.  Id. at 28.  Specifically, the Court opined that the certification of a class on the issue of liability for any damages (compensatory or punitive) would not be appropriate due to the individual issues which would predominate whether and to what extent AT&T would be liable to any particular putative class member.  Accordingly, the Court held that Rule 23(a)(4) should not be employed under the circumstances of this particular case.  Id. at 29.

Implications For Employers

The ruling in Allen is noteworthy for employers as the latest in PDA class action litigation — a significant issue of concern for all employers.  Indeed, pregnancy discrimination has been highlighted by the EEOC as an issue of focus in recent years.  When plaintiffs attempt to certify classes with putative class members who were allegedly harmed by a common employment policy or practice, employers can point to Allen to illustrate why class treatment is still not appropriate.  Though Plaintiffs were able to establish all four of the Rule 23(a) prerequisites, the lack of glue amongst all pregnant employees’ experiences relative to the SAG precluded them from certifying a class under the requirements of Rule 23(b).

By Gerald L. Maatman, Jr. and Alex W. Karasik

Seyfarth Synopsis:  In EEOC v. Sherwood Food Distributors, Inc., No. 16-CV-2386, 2022 U.S. Dist. LEXIS 32921 (N.D. Ohio Feb. 24, 2022), a federal court in Ohio held an employer in contempt for failing to pay its payroll tax liabilities, as required by an EEOC consent decree that resolved a systemic discrimination lawsuit. In addition to paying the outstanding payroll tax, the Court ordered the employer to pay an additional $46,858.55 resulting from the 3.8% tax rate increase during the time of the contempt dispute, as well as potential settlement administrator fees.

This ruling should serve as a cautionary tale for employers in regards to negotiating and timely satisfying financial obligations in EEOC consent decrees.

Case Background

On September 27, 2016, the EEOC filed a lawsuit against Sherwood, alleging that it engaged in discriminatory hiring practices that adversely impacted female applicants, in violation of Title VII of the Civil Rights Act of 1964 (“Title VII”). The parties subsequently settled the litigation and entered into a Consent Decree, whereby Sherwood agreed to place $3.6 million into a Qualified Settlement Fund (“QSF”) account administered by a third-party (the “Administrator”) within 30 days of entry of the Consent Decree.  d. at *2.  These funds were to provide monetary relief to individuals that the EEOC determined were subjected to the alleged discrimination. Id. The monetary relief constituted both back pay and other monetary damages available under Title VII. Id. The EEOC was given the authority to determine what type of monetary relief would be paid to the eligible claimants (“Claimants”).

The EEOC alleged that Sherwood subsequently violated the Consent Decree by refusing to pay its payroll tax liability and therefore preventing the distribution of the $3.6 million to the Claimants by December 14, 2021.  In relevant part, the Consent Decree stated that Sherwood was responsible for paying its share of all applicable pay roll taxes and that the Administrator would inform Sherwood, “of the amounts of back pay distributed to each person from the QSF and all other information necessary for [Sherwood] to satisfy its payroll tax liabilities.” Id. The Administrator notified Sherwood’s counsel on December 1, 2021, of the amount that it owed in payroll taxes and provided notice that payment of the payroll taxes must be received on December 10, 2021, for the award checks to be timely distributed. The EEOC’s counsel communicated with Sherwood’s counsel in an attempt to compel the payment of the payroll taxes, but Sherwood indicated it would not make the payroll tax payment.

On January 27, 2022, the Court held a hearing regarding the EEOC’s motion for civil contempt.  Upon Sherwood’s request for a breakdown of the individual payments to be made to the Claimants, the Court continued the hearing until January 31, 2022.  Prior to the start of the hearing on January 31, 2022, the Administrator notified Sherwood that its total payroll taxes owed had increased from $361,890.68 to $408,749.23 due to the Ohio Department of Jobs and Family Services’ increase in QSF state unemployment tax rate from 2.7% in 2021 to 6.5% in 2022.  At the hearing, the parties were ordered to submit proposed findings of fact and conclusion of law, which were subsequently submitted on February 10, 2022.  Id. at 2-3.

The Court’s Decision

The Court held Sherwood in civil contempt for violating the Consent Decree. First, the Court explained that in order to establish a finding of civil contempt, the EEOC must show that the other party violated a definite and specific order of the Court, through “clear and convincing evidence.” Id. at *4 (citations omitted). The Court noted that the Consent Decree explicitly stated numerous times that Sherwood was responsible for payroll tax liability, and that distribution of the settlement funds must be completed by December 14, 2021.  Further, the EEOC produced email communications that Sherwood was informed of its payroll tax duties by the Administrator in accordance with the Consent Decree.  Accordingly, the Court held there was, “clear and convincing evidence,” that Sherwood violated the Consent Decree. Id.

Second, the Court held that Sherwood did not meet its burden to demonstrate that it took all reasonable steps to comply. Sherwood claimed that it attempted to negotiate an extension of the deadline, but the Court rejected this approach, noting that its extension request ten days before the deadline was untimely. Id. The Court thus held that, “Upon [the EEOC’s] unwillingness to negotiate, [Sherwood] should have complied with the Decree and the Administrator’s request for payment.” Id.

Third, the Court held that Sherwood failed to satisfy its burden of giving a detailed explanation as to why it could not presently comply with the Consent Decree and pay the $408,749.23 in payroll taxes. Id. at *5. The Court reasoned that Sherwood made no claim that it did not have the funds, nor did it offer any evidence of its financial situation.  In lieu of offering such evidence, Sherwood proposed paying in installments. The Court rejected this proposal as untimely. It opined that Sherwood should have made the proposal during settlement negotiations. In addition, the Court dismissed Sherwood’s argument that the EEOC conducted its investigation too slowly.

Accordingly, the Court held Sherwood in civil contempt for violating the Consent Decree. Sherwood argued it should only be responsible for paying the initial $361,890.68 and should not be required to pay the additional $46,858.55 resulting from the 3.8% tax increase. The Court rejected this argument on the grounds that the crease in taxes owed was a result of Sherwood’s delay. As such, the Court ordered Sherwood to pay the full amount of $408,749.23 within 30 days of its order, and to pay any additional costs incurred by the Administrator’s fulfillment of his duties that exceed the $35,000 amount set forth in the Consent Decree.

Impact For Employers

This ruling is an eye-opener for employers in terms of the potential implications for not satisfying obligations in any Consent Decree. Here, the employer’s delay was costly, as a change in the calendar year during the dispute led to an increased payroll tax debt. Accordingly, employers must be pragmatic when negotiating consent decree deadlines in EEOC-initiated litigation, and equally diligent in meeting those deadlines.

Readers can also find this post on our EEOC Countdown blog here.

Seyfarth Synopsis: Please join us tomorrow, Tuesday, February 15th for the 18th Annual Workplace Class Action Litigation Report webinar! Register now to secure your spot and review the workplace class action developments of 2021 and what employers should expect for 2022.

About the Program: In our 18th Annual Workplace Class Action Litigation Report Webinar, speakers will provide an in-depth interactive analysis of the class action decisions that shaped labor & employment litigation in 2021 and highlight the key trends emerging for 2022.

As developments in workplace class action litigation continue to evolve under pressure from pro-labor lawmakers and adjust to the modern realities of the American workplace shaped by the ongoing pandemic, corporate counsel and business leaders face unprecedented new challenges and must adapt by recalibrating their compliance strategies to stay ahead of these risks and exposures throughout the year.

Click here to register and attend!

Webinar Date/Time:

Tuesday, February 15, 2022

1:00 p.m. to 2:00 p.m. Eastern
12:00 p.m. to 1:00 p.m. Central
11:00 a.m. to 12:00 p.m. Mountain
10:00 a.m. to 11:00 a.m. Pacific

Speakers:

Gerald L. Maatman, Jr., Partner, Seyfarth Shaw LLP
Kerry M. Friedrichs, Partner, Seyfarth Shaw LLP
Ian H. Morrison, Partner, Seyfarth Shaw LLP
Jennifer A. Riley, Partner, Seyfarth Shaw LLP

Seyfarth Synopsis: In its recent review of Seyfarth’s 2022 Annual Workplace Class Action Litigation Report, EPLiC Magazine called the Report a “must-have resource,” the “only publication of its kind,” and that no corporate counsel “should be without it.”

We are humbled and honored by the recent review of our 2021 Annual Workplace Class Action Litigation Report by Employment Practices Liability Consultant Magazine (“EPLiC”) – the review is here.

EPLiC said: “The Report is a must-have resource for legal research and in-depth analysis of employment-related class action litigation. The Report is the only publication of its kind in the United States. It has been cited in briefs to the US Supreme Court and is considered ‘the Bible’ on class action issues that arise in the workplace.”

EPLic stated: “The encyclopedic, 825-page 2022 Seyfarth Shaw Annual Workplace Class Action Litigation Report insightfully examines and analyzes a massive array of class action case decisions. In addition, the federal cases examined in the Report are indexed by federal circuit—an invaluable feature that further enhances the Report’s utility. The Report is also available in e-Book format and is fully searchable.”

We are often asked – “How does it happen – how do you produce your Annual Workplace Class Action Litigation Report?”

The answer is pretty simple – we live, eat, and breathe workplace class action law 24/7.

Each and every morning we check the previous day’s filings of EEOC lawsuits and workplace class actions relative to employment discrimination, ERISA, and wage & hour claims. We do so on a national basis, both in federal courts and all 50 states. Then we check, log, and analyze every ruling on Rule 23 certification motions and subsidiary issues throughout federal and state trial and appellate courts. This is also done on a national basis.  We put this information in our customized database; we analyze and compare the rulings on class action issues and Rule 23 topics, and then we prepare an analysis of each and every decision.

Our class action practitioners contribute to the process of building the database and analyzing decisional law on a daily basis.

We have being doing this on a 24/7 basis for over 18 years, and publishing the Annual Workplace Class Action Litigation Report in the first week of January of each calendar year.

The result is a compendium of workplace class action law that is unique in its analysis, scope, and comprehensiveness. Thanks for the kudos EPLiC – we sincerely appreciate it!

We look forward to making the 2023 Report more comprehensive than ever!

By Jennifer Riley, Gerald L. Maatman, Jr., Tyler Zmick, Alex Karasik, Sarah Bauman, and Greg Tsonis

Seyfarth Synopsis:  The Illinois Supreme Court issued its long-awaited decision in McDonald v. Symphony Bronzeville Park, LLC, et al., 2022 IL 126511 (Feb. 3, 2022), holding that claims for statutory damages against an employer under the Illinois Biometric Information Privacy Act (“BIPA”) are not preempted by the exclusivity provisions of the Illinois Workers’ Compensation Act (the “IWCA”).  This ruling is a major development in the BIPA class action landscape, as it resolves a frequently-contested issue and effectively precludes employers from asserting IWCA preemption as a defense to BIPA claims. 

Case Background

The plaintiff in McDonald claimed her former employer, Symphony Bronzeville Park, LLC, violated the BIPA by requiring her 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 written consents required by the statute.  Defendant moved to dismiss on the basis that plaintiff’s claims were barred by the exclusivity provisions of the IWCA, under which the sole remedies for employees who have suffered work-related injuries are the remedies set forth in the IWCA.

The trial court denied defendant’s motion to dismiss but certified for appeal the question whether the IWCA’s exclusivity provisions bar a claim for statutory damages under BIPA.  The Illinois Appellate Court affirmed on the grounds that a BIPA claim for statutory damages is not an injury compensable under the IWCA.  See McDonald v. Symphony Bronzeville Park LLC, 2020 IL App (1st) 192398, ¶ 27.

The Illinois Supreme Court’s Decision

On appeal to the Illinois Supreme Court, defendant argued that the IWCA precluded plaintiff’s action because plaintiff’s alleged injury occurred in the course of her employment — meaning her available remedies were limited to those set forth in the IWCA.  In opposition, plaintiff argued that the IWCA’s exclusivity provisions applied only to physical or psychological injuries that are compensable under the IWCA and that a privacy injury under the BIPA constitutes a different type of injury.

The Supreme Court agreed with plaintiff. It held unanimously that her BIPA claims could proceed because her alleged privacy injury “is not categorically within the purview of the [IWCA].”  McDonald v. Symphony Bronzeville Park, LLC, 2022 IL 126511, ¶ 44.

The Supreme Court analyzed the BIPA’s purpose, as articulated in the 2019 decision in Rosenbach v. Six Flags Entertainment Corp., 2019 IL 123186.  The Supreme Court reiterated that through the BIPA, the Illinois General Assembly “codified that individuals possess a right to privacy in and control over their biometric identifiers and biometric information,” and that “when a private entity fails to comply with one of section 15’s requirements, that violation constitutes an invasion, impairment, or denial of the statutory rights of any person or customer whose biometric identifier or biometric information is subject to the breach.”  McDonald, 2022 IL 126511, ¶ 24 (quoting Rosenbach, 2019 IL 123186, ¶ 33).

The Supreme Court explained that the IWCA generally provides the exclusive remedy for work-related injuries, unless a plaintiff can establish one of the four recognized exceptions to the IWCA’s exclusivity provisions, including: (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 IWCA.  McDonald presented a question regarding the fourth exception, i.e., whether the injury resulting from a BIPA violation is compensable under the IWCA.

In answering in the negative, the Supreme Court relied primarily on its decision in Folta v. Ferro Engineering, where a plaintiff diagnosed with mesothelioma sued his former employer after allegedly being exposed to asbestos on the job.  2015 IL 118070, ¶ 3.  The trial court granted plaintiff’s employer’s motion to dismiss based on the exclusivity provisions of the Workers’ Occupational Diseases Act (the “WODA”), which were interpreted in accordance with the IWCA’s exclusivity provisions.  The plaintiff argued the exclusivity provisions did not apply pursuant to the “compensability” exception because he could not recover under the WODA in that he filed his claim beyond the 25-year repose period.  The Illinois Appellate Court reversed. It opined that the plaintiff’s inability to recover damages under the WODA placed his case within the exception for “non-compensable injuries.”

The Supreme Court reversed the appellate ruling, concluding that the exclusivity provisions barred the plaintiff’s cause of action even though compensation was unavailable due to the statutory time limits.  Folta framed the question of whether an injury is compensable as “not whether an injury was literally compensable, i.e., whether the employee could literally receive compensation for injuries under the acts,” but “whether the type of injury categorically fits within the purview of the” workers’ compensation acts.”  McDonald, 2022 IL 126511, ¶ 24 (quoting Folta, 2015 IL 118070, ¶ 23).  Because the WODA addressed diseases caused by asbestos exposure, Folta held that the plaintiff’s injury was “the type of injury contemplated to be within the scope of” the WODA.  Id. ¶ 39 (quoting Folta, 2015 IL 118070, ¶ 25).

Using Folta’s framework, the Supreme Court in McDonald held that injuries caused by BIPA violations “are different in nature and scope from the physical and psychological work injuries that are compensable under the [IWCA].”  Id. ¶ 43.  The Supreme Court contrasted “injuries that affect an employee’s capacity to perform employment-related duties, which is the type of injury for which the workers’ compensation scheme was created,” with the privacy injuries “caused by violating [BIPA’s] prophylactic requirements.”  Id.

The Supreme Court further noted that the BIPA’s text supported its conclusion because the BIPA “defines the precollection ‘written release’ required by” Section 15(b) of the BIPA “to include ‘a release executed by an employee as a condition of employment.’”  Id. ¶ 45 (quoting 740 ILCS 14/10).  The Supreme Court reasoned that the legislature knew BIPA claims could arise in the employment context, “yet it treated them identically to nonemployee claims except as to permissible methods of obtaining consent.  Therefore, the text of [the BIPA] itself . . . is further evidence that the legislature did not intend for [BIPA] claims to be presented to the Workers’ Compensation Commission.”  Id. ¶ 45.

Implications For Employers

McDonald has major implications for employers facing BIPA claims.  The decision effectively makes the IWCA preemption defense unavailable in BIPA cases.  Moreover, many BIPA cases pending in state and federal courts have been stayed pending the Illinois Supreme Court’s McDonald decision, and those stays may soon be lifted in light of the opinion being released.

Significant questions remain, however, regarding BIPA’s application to companies that collect biometric information.  Some questions will be decided in other appeals pending before the Illinois Supreme Court, which may lead courts to maintain previously-entered stays despite the issuance of McDonald.  For example, the U.S. Court of Appeals for the Seventh Circuit recently issued a decision in Cothron v. White Castle Systems, 20 F.4th 1156 (7th Cir. 2021), certifying to the Illinois Supreme Court the question whether claims asserted under Sections 15(b) and 15(d) of the BIPA accrue only once upon the initial collection or disclosure of biometric information, or each time a private entity collects or discloses biometric information.  (See here).  Similarly, the limitations period applicable to BIPA claims remains unresolved.  As previously noted (here), the Illinois Appellate Court in Tims v. Black Horse Carriers, Inc., 2021 IL App (1st) 200563 (1st Dist. Sept. 17, 2021), held that a one-year limitations period governs actions brought under BIPA Sections 15(c) and (d), while claims under BIPA Sections 15(a), (b), and (e) are subject to the catch-all five-year limitations period.  The Illinois Supreme Court allowed the Tims defendant’s petition for leave to appeal on January 26, 2022 — meaning it is poised to issue two more critical BIPA rulings in the coming months.

Seyfarth Synopsis: Please join us on Tuesday, February 15th for the 18th Annual Workplace Class Action Litigation Report webinar! Register now to secure your spot and review the workplace class action developments of 2021 and what employers should expect for 2022.

About the Program: In our 18th Annual Workplace Class Action Litigation Report Webinar, speakers will provide an in-depth interactive analysis of the class action decisions that shaped labor & employment litigation in 2021 and highlight the key trends emerging for 2022.

As developments in workplace class action litigation continue to evolve under pressure from pro-labor lawmakers and adjust to the modern realities of the American workplace shaped by the ongoing pandemic, corporate counsel and business leaders face unprecedented new challenges and must adapt by recalibrating their compliance strategies to stay ahead of these risks and exposures throughout the year.

Click here to register and attend!

Webinar Date/Time:

Tuesday, February 15, 2022

1:00 p.m. to 2:00 p.m. Eastern
12:00 p.m. to 1:00 p.m. Central
11:00 a.m. to 12:00 p.m. Mountain
10:00 a.m. to 11:00 a.m. Pacific

Speakers:

Gerald L. Maatman, Jr., Partner, Seyfarth Shaw LLP
Kerry M. Friedrichs, Partner, Seyfarth Shaw LLP
Ian H. Morrison, Partner, Seyfarth Shaw LLP
Jennifer A. Riley, Partner, Seyfarth Shaw LLP

 

 

Seyfarth Synopsis: Register today and come join us tomorrow at a Seyfarth Exclusive Event!

You are invited to join Paige Smith of Bloomberg Law and Seyfarth Partner Gerald (“Jerry”) L. Maatman, Jr. for a virtual panel discussion marking the release and book launch of Seyfarth’s 18th Annual Workplace Class Action Litigation Report. Please register here to join this event!

As we move into a shifting landscape of policy and litigation developments in 2022, employers are seeking insights to prepare for the challenges of the future of complex workplace litigation. At this important event, the presenters will provide their analyses of significant trends in workplace class action litigation and government enforcement actions, and a look ahead to likely developments in 2022. Jerry will also discuss the top class action rulings in 2021 and hot topics for 2022, including key trends in class certification, government enforcement litigation, and COVID-19 litigation.

Webinar:

Tuesday, February 1st

Noon – 1 p.m. Eastern
11 a.m. – Noon Central
10 a.m. – 11 a.m. Mountain
9 a.m. – 10 a.m. Pacific

Speakers:

 

 

 

 

 

Paige Smith is a Reporter with Bloomberg Law, covering labor and employment policy on Capitol Hill. She previously covered the Equal Employment Opportunity Commission and the Labor Department’s Office of Federal Contract Compliance Programs, as well as reporting on various employment law-related news.

 

 

 

 

 

 

Gerald L. Maatman, Jr. is one of Seyfarth’s preeminent class action litigators, co-chair of our Class Action Litigation Practice Group, and the Editor of the Workplace Class Action Litigation Report, which is recognized as the nation’s most complete guide to workplace-related complex litigation.

Seyfarth Exclusive! Live Webinar

There is still time to register to attend Seyfarth’s Exclusive Live Webinar Event! You are invited to join Paige Smith of Bloomberg Law and Seyfarth Partner Gerald (“Jerry”) L. Maatman, Jr. for a virtual panel discussion marking the release and book launch of Seyfarth’s 18th Annual Workplace Class Action Litigation Report. Please register here to join now!

As we move into a shifting landscape of policy and litigation developments in 2022, employers are seeking insights to prepare for the challenges of the future of complex workplace litigation. At this important event, the presenters will provide their analyses of significant trends in workplace class action litigation and government enforcement actions, and a look ahead to likely developments in 2022. Jerry will also discuss the top class action rulings in 2021 and hot topics for 2022, including key trends in class certification, government enforcement litigation, and COVID-19 litigation.

Webinar:

Tuesday, February 1st

Noon – 1 p.m. Eastern
11 a.m. – Noon Central
10 a.m. – 11 a.m. Mountain
9 a.m. – 10 a.m. Pacific

Speakers:

 

 

 

 

 

Paige Smith is a Reporter with Bloomberg Law, covering labor and employment policy on Capitol Hill. She previously covered the Equal Employment Opportunity Commission and the Labor Department’s Office of Federal Contract Compliance Programs, as well as reporting on various employment law-related news.

 

 

 

 

 

Gerald L. Maatman, Jr. is one of Seyfarth’s preeminent class action litigators, co-chair of our Class Action Litigation Practice Group, and the Editor of the Workplace Class Action Litigation Report, which is recognized as the nation’s most complete guide to workplace-related complex litigation.