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Financial Services Law Insights and Observations

District Court denies defendant’s motion to dismiss Illinois BIPA class action

Courts BIPA Illinois Data Collection / Aggregation Class Action Privacy/Cyber Risk & Data Security State Issues

Courts

On October 28, the U.S. District Court for the Northern District of Illinois denied a Delaware-based technology management service defendant’s motion to dismiss a putative class action that alleged it stored and collected biometric data from employees of companies that utilized the defendant’s timekeeping services. The court also granted the plaintiff’s motion to remand two of her three claims to state court because the plaintiff had not alleged an injury in fact sufficient to establish Article III standing in federal court for those claims.

The plaintiff alleged that the defendant violated the Illinois’ Biometric Information Privacy Act (BIPA) by selling time and attendance solutions to Illinois employers, including biometric-enabled hardware such as fingerprint and facial recognition scanners that collected and stored employee biometrics data. The plaintiff alleged that the defendant violated Section 15(a) of BIPA by failing to publish a retention schedule for the biometric data, violated Section 15(b) of BIPA by obtaining the plaintiff’s biometric data without first providing written disclosures and obtaining written consent, and violated section 15(c) of BIPA, by participating in the dissemination of her biometric data among servers. According to the district court, the plaintiff lacked standing regarding the Section 15(a) claim because the harm resulting from the defendant’s failure to publish a retention policy was not sufficiently particularized and the plaintiff had not otherwise alleged a concrete injury resulting from the violation. The district court concluded that the plaintiff’s Section 15(c) claim also lacked standing because, though she alleged that the defendant profits off its biometric data collection practices by marketing its biometric time clocks that utilize the software as “superior options” and “gains a competitive advantage”, the “complaint doesn't allege an injury in fact stemming from [the defendant’s] profiting off of [the plaintiff’s] biometric data.”

With regard to the Section 15(b) claim, the district court rejected the defendant’s argument that the requirement to inform clients regarding its biometric data collection and receiving written consent did not apply, noting that the defendant is right that it “doesn’t penalize mere possession of biometric information.” However, that does not help the defendant “because the complaint alleges that defendant did more than possess [the plaintiff’s] biometric information: it says that [the defendant] collected and obtained it.” Additionally, the district court rejected the defendant’s argument that it is not liable as a third-party vendor who lacks the power to obtain the required written releases from its clients’ employees. The district court stated that “while it’s probably true that [the defendant] wasn’t in a position to impose a condition of employment on its clients’ employees, the statutory definition of a written waiver doesn’t excuse vendors like [the defendant] from securing their own waivers before obtaining a person’s data.”

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