Yesterday’s Illinois Appellate Court BIPA ruling means Illinois employers need to check their employee arbitration agreements and amend them to explicitly cover privacy claims.

The decision yesterday in Liu v. Four Seasons Hotel, Ltd. creates another pitfall and need for employers in Illinois worrying about the Illinois Biometric Information Privacy Act.

We wrote a little while ago about the parade of horribles unleashed by the Illinois Supreme Court in determining that an actual injury is not necessary to receive the liquidated damages available under the Illinois Biometric Information Privacy Act.

Fingerprints are likely the way most employers might be in violation. Time clocks, door locks and other 21st Century revamps of 20th Century employment practices incorporate useful updates like accepting fingerprints or retinal scans, and the Act covers a multitude of biometric data that can result in a violation if employers don’t obtain waivers and consents.

And now, this. An Illinois Appellate Court has just ruled that it is a privacy statute, not a wage and hour statute. So an employment agreement incorporating an arbitration provision that applies to “wage and hour violations” and not “privacy suits” won’t allow an employer to push an otherwise liquidated damages threatening class action into arbitration.

That’s what happened in the Four Seasons case. The employees of the hotel brought a class action alleging the hotel had violated their rights under BIPA by collecting fingerprints for timekeeping purposes. The hotel countered saying the employees had agreed to arbitrate disputes and wanted their claims moved to that forum. But the arbitration provisions in the employees agreements said that arbitration provision covered four types of employment disputes:

1) employment discrimination,

2) harassment as it relates to employment,

3) wage or hour violations, and

4) termination of employment from the hotel.

Note that “privacy rights laws” or “other statutory claims” are absent from the list of selected disputes.

The Appellate Court held that BIPA is “a privacy rights law that applies inside and outside the workplace.” So when the hotel argued that this suit was included in the chosen set of arbitrable disputes as a wage and hour claim, the Court disagreed. “Simply because an employer opts to use biometric data, like fingerprints, for timekeeping purposes does not transform a complaint into a wages or hours claim.” In ruling this way, the Appellate Court upheld the trial court decision that the employees were not subject to arbitration.

The Takeaway: In addition to following our guidance from before about this Act, employers who believe they’ve circumvented the problem of hefty liquidated damages in a class action ($1,000 per employee plus attorneys’ fees) by having arbitration provisions that encompass employee claims need to review those agreements and get them amended if they don’t involve privacy rights suits or BIPA or other statutory actions.

Ashley Brandt

Hi there! I’m happy you’re here. My name is Ashley Brandt and I’m an attorney in Chicago representing clients in the Food and Beverage, Advertising, Media, and Real Estate industries. A while back I kept getting calls and questions from industry professionals and attorneys looking for advice and information on a fun and unique area of law that I’m lucky enough to practice in. These calls represented a serious lack of, and need for, some answers, news, and information on the legal aspects of marketing and media. I've got this deep seeded belief that information should be readily available and that the greatest benefit from the information age is open access to knowledge... so ... this blog seemed like the best way to accomplish that. I enjoy being an attorney and it’s given me some amazing opportunities, wonderful experiences, and an appreciation and love for this work. I live in Chicago and work at an exceptional law firm, Goldstein & McClintock, with some truly brilliant people. Feel free to contact me at any time with any issues, comments, concerns… frankly, after reading this far, I hope you take the time to at least let me know what you think about the blog and how I can make it a better resource.

You may also like...

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.