On February 3, 2022, the Illinois Supreme Court held in the case of McDonald v. Symphony Bronzeville Park, LLC, 2022 IL 126511, that the exclusivity provisions of the Illinois Workers' Compensation Act (the "Compensation Act") do not preempt a claim for statutory damages under the Illinois Biometric Information Privacy Act ("BIPA"). The Court found that damages to an individual's right to privacy as a result of a BIPA violation are not the type of compensable injuries capable of redress under the Compensation Act. This decision, while bootstrapping an employer's protections from claims for severe physical and psychological injuries sustained in the workplace, leaves employers exposed to tremendous liability for technical BIPA violations even without a showing of actual damages.
What You Need to Know:
- Issues surrounding the Illinois Biometric Information Privacy Act ("BIPA") have been hotly contested since the Illinois Supreme Court issued its decision in Rosenbach v. Six Flags Entertainment Corp. where it held that an individual may bring a cause of action under BIPA without sustaining damages.
- The Illinois Supreme Court granted leave to appeal in McDonald v. Symphony Bronzeville Park, LLC in order to decide whether the Illinois Workers' Compensation Act preempted an individual's BIPA violation claim.
The scope and application of BIPA has been hotly contested in state and federal courts across the country in recent years. In January 2019, the Illinois Supreme Court issued its decision in Rosenbach v. Six Flags Entertainment Corp., 2019 IL 123186, which held that an individual need not show any actual injury suffered in order to bring a BIPA claim against a company that improperly collects or uses biometric information from customers or employees. The Rosenbach decision resulted in an influx of individual and class action claims against companies that use biometric identifiers in their business. Subsequently, the Illinois Appellate Court for the First District decided West Bend Mutual Insurance Company v. Krishna Schaumburg Tan, Inc., which described an insurer's duty to defend an insured from claims brought under BIPA. Litigation has spread to the federal courts as well. In Thornley v. Clearview AI, Inc. and Bryant v. Compass Group USA, Inc., for instance, the 7th Circuit Court of Appeals addressed the federal standing requirements for bringing BIPA claims in federal court.
Notwithstanding the flurry of decisions, certain issues surrounding BIPA still remain to be determined. For instance, the applicable statute of limitations for BIPA claims has yet to be definitively settled. In Watson v. Legacy Healthcare Financial Services, LLC et al., the Illinois Appellate Court for the First District specifically declined to rule on the length of the BIPA statute of limitations because neither side had challenged on appeal the trial court's conclusion that it is five years. 2021 IL App (1st) 210279, ¶ 3. Though the Watson court rejected the defendants' contention that the statute of limitations begins to run when an individual's biometric information is first collected (thereby answering a certified question posed by the 7th Circuit in Cothron v. White Castle Systems, Inc., No. 20-3202), it left to be determined whether BIPA damages are to be calculated based on the number of times a defendant collected a plaintiff's biometric information within the statute of limitations period. Id. at ¶ 45.
Against this backdrop, McDonald v. Symphony Bronzeville Park provides helpful guidance on an important issue affecting BIPA claims. In McDonald, the plaintiff filed a putative class action complaint against defendants Symphony Bronzeville Park, her employer, and two related entities Symcare Healthcare and Symcare HMG, alleging that their collection, use, and storage of her and the putative class's biometric information violated BIPA. Plaintiff alleged that during the course of her employment, defendants required her to scan her fingerprint into an electronic system in order to track her time. Plaintiff alleged that she was not provided with nor did she ever sign a release consenting to the storage of her information, and had never been informed of the purpose or length of time for which her information was being stored, all in violation of the informed consent provisions codified in BIPA.
Defendant Bronzeville moved to dismiss the class action complaint on the grounds that plaintiff's claims were barred by the exclusive remedy provisions in the Compensation Act. The first of those provisions states:
No common law or statutory right to recover damages from the employer *** for injury or death sustained by any employee while engaged in the line of his duty as such employee, other than the compensation herein provided, is available to any employee who is covered by the provisions of this Act, to any one wholly or partially dependent upon him, the legal representatives of his estate, or any one otherwise entitled to recover damages for such injury.
820 ILCS § 305/5(a). Similarly, the second provision states:
The compensation herein provided, together with the provisions of this Act, shall be the measure of the responsibility of any employer engaged in any of the enterprises or businesses enumerated in Section 3 of this Act, or of any employer who is not engaged in any such enterprises or businesses, but who has elected to provide and pay compensation for accidental injuries sustained by any employee arising out of and in the course of the employment according to the provisions of this Act, and whose election to continue under this Act, has not been nullified by any action of his employees as provided for in this Act.
Id. at § 11. Bronzeville argued that the above provisions render the Compensation Act the exclusive remedy for workplace injuries and that an employee has no common law or statutory right to recover civil damages for injuries that arise in the scope of employment.
The trial court denied Bronzeville's motion, finding that the plaintiff's injury was framed by her inability to maintain her privacy rights, which was neither a physical or psychological injury capable of redress under the Compensation Act. The trial court also found that because BIPA defined the term "written release" in the employment context, the legislature must have intended for BIPA to apply to the workplace. Bronzeville moved the trial court to reconsider or, alternatively, to certify a question for immediate appeal pursuant to Illinois Supreme Court Rule 308. The trial court denied Bronzeville's motion to reconsider but certified the following question for appeal:
"Do the exclusivity provisions of the [Compensation Act] bar a claim for statutory damages under [BIPA] where an employer is alleged to have violated an employee's statutory privacy rights under [BIPA]?"
The Illinois Appellate Court for the First District answered this question in the negative, agreeing with the trial court and finding that the Compensation Act does not preempt a claim for statutory damages under BIPA. The appellate court reasoned:
[A] claim by an employee against an employer for liquidated damages under [BIPA]—available without any further compensable actual damages being alleged or sustained and designed in part to have a preventative and deterrent effect—[does not] represent the type of injury that categorically fits 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.
Plaintiff subsequently sought and obtained leave to appeal to the Illinois Supreme Court.
The Illinois Supreme Court agreed with the trial and appellate courts and answered the certified question in the negative. Relying on its precedent set forth in Folta v. Ferro Engineering, 2015 IL 118070, the Court noted that the exclusivity provisions of the Compensation Act do not apply where the employee's injury is not compensable under the Compensation Act. In Folta, the Court held that a plaintiff's claim against his employer for being exposed to asbestos in the workplace (which ultimately led to his contracting mesothelioma) was precluded by the exclusivity provisions of the Illinois Workers' Occupational Diseases Act ("WODA") even though the plaintiff had filed suit after WODA's 25-year statute of limitations had expired. The Folta Court noted that whether an injury is compensable under WODA depends on whether the type of injury alleged categorically fits within WODA's purview, not whether the employee's claim was literally compensable.
To determine whether McDonald's privacy injury fell within the purview of the Compensation Act, the Court looked to its holding in Pathfinder Co. v. Industrial Commission, 65 Ill. 2d 556, 565 (1976), where the Court held that whether an employee's injury fits within the scope of the Compensation Act depends on "whether there was a harmful change in the human organism—not just bones and muscles, but its brain and nerves as well."
Applying the facts of McDonald's claim to this test, the Court found that the injuries caused by a BIPA violation are different in nature and scope than those injuries that are compensable under the Compensation Act. More specifically, the Court found that an individual's loss of the ability to withhold consent to an employer's access to the employee's biometric information is not a physical or psychological injury having an effect on the human organism. Further, and like the trial court, the Supreme Court took note of the fact that BIPA defines the pre-collection "written release" to include "a release executed by an employee as a condition of employment." 740 ILCS § 14/10. The Court interpreted this language as indicative of the legislature's intent to allow BIPA claims to be brought outside the scope of the Compensation Act.
Though the Court acknowledged the general dearth of Illinois case law addressing the compensability component of the Compensation Act, the Court distinguished the facts of McDonald's BIPA claim from other cases where the Court found that the exclusivity provisions of the Compensation Act barred suit. The Court distinguished Meerbrey v. Marshall Field and Co., Inc., for instance, which held that the Compensation Act's exclusivity provisions precluded an employee, who suffered emotional distress as a consequence of false imprisonment, false arrest, or malicious prosecution in the workplace, from suing for civil damages against his former employer. 139 Ill. 2d 455, 469 (1990). The Court also distinguished Collier v. Wagner Castings Co., 81 Ill. 2d 229, 241 (1980) (holding that the Compensation Act's exclusivity provisions precluded employee, who had collected workers' compensation settlement, from suing for civil damages for emotional distress against his employer who failed to provide medical assistance after he suffered a heart attack), and Pathfinder, 62 Ill. 2d at 564-65 (holding that employee, who suffered a sudden, severe emotional shock and psychological disability after assisting coemployee whose hand was severed in a machine, could recover under the Compensation Act even though no physical trauma or injury was sustained).
The Court also looked to principles of statutory construction, which require the Court to interpret BIPA and the Compensation Act by their statutory language, but allow the Court to consider the reason for the law, the problems sought to be remedied, the purposes to be achieved, and the consequences of construing the statute one way or another. Examining the history and purpose of the Compensation Act, the Court noted that it was enacted to provide injured workers with compensation for injuries until they could return to the workforce, and it sets forth a compensation schedule with specific values associated with specific injuries. These injuries, the Court held, "are 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."
While the Court acknowledged the effect of its holding as creating the potential for claimants to cleverly evade the scope of the Compensation Act's exclusivity provisions and bring costly (and potentially bankrupting) litigation against businesses, the Court held that limiting the risk of exposure of an individual's biometric information through enforcement of BIPA's provisions outweighed these risks to businesses. This, the Court noted, was the Illinois legislature's desired result.
The Illinois Supreme Court's decision offers guidance on the scope of the exclusivity provisions of the Compensation Act. Moreover, by confirming that claims for statutory damages under BIPA are not preempted by the Compensation Act, it confirms the need for businesses to ensure BIPA compliance before collecting their employees' or customers' biometric identifiers, as the failure to comply could result in exposure to potentially devastating financial liability. With respect to its class action implications in particular (as many BIPA claims are pending as class actions), the Court's decision may prompt businesses that collect biometric information to consider adopting alternative dispute resolution provisions in their employment agreements in order to reduce the possibility of having to defend expensive class action claims.
For questions about this ruling, the Illinois Biometric Information Privacy Act, or other matters relating to class action litigation and data privacy and cybersecurity, please contact the author or other members of the Saul Ewing LLP Class Action Litigation and Cyber Security and Privacy Practice Groups.