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.
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.