Has your company recently beefed up its employee identification and access security and added biometric identifiers, such as fingerprints, facial recognition, or retina scans? Have you implemented new timekeeping technology utilizing biometric identifiers like fingerprints or palm prints in lieu of punch clocks? All of these developments provide an extra measure of security control beyond key cards which can be lost or stolen, and can help to control a time-keeping fraud practice known as “buddy punching.” If you have operations and employees in Illinois (or if you utilize biometrics such as voice scans to authenticate customers located in Illinois), your risk and liability could have increased with the adoption of such biometric technology, so read on ….
What’s the Issue in Illinois?
The collection of biometric identifiers is not generally regulated either by the federal government or the states. There are some exceptions, however. Back in 2008, Illinois passed the first biometric privacy law in the United States. The Biometric Information Privacy Act, known as “BIPA,” makes it unlawful for private entities to collect, store, or use biometric information, such as retina/iris scans, voice scans, face scans, or fingerprints, without first obtaining individual consent for such activities. BIPA also requires that covered entities take specific precautions to secure the information. BIPA also carries statutory penalties for every individual violation that can multiply quickly … and the lawsuits against employers have been coming by the dozens over the past few months.
The Requirements of BIPA
Among other requirements, under BIPA, any “private entity” — including employers — collecting, storing, or using the biometric information of any individual in Illinois – no matter how it is collected, stored or used, or for what reason – must:
- Provide each individual with written notice that his/her biometric information will be collected and stored, including an explanation of the purpose for collecting the information as well as the length of time it will be stored and/or used.
- Obtain the subject’s express written authorization to collect and store his/her biometric information, prior to that information being collected.
- Develop and make available to the public a written policy establishing a retention schedule and guidelines for destroying the biometric information, which shall include destruction of the information when the reason for collection has been satisfied or three years after the company’s last interaction with the individual, whichever occurs first.
Also, any such information collected may not be disclosed to or shared with third parties without the prior consent of the individual.
The Money Issue
Under the law, plaintiffs may recover statutory damages of $1,000 for each negligent violation and $5,000 per intentional or reckless violation, plus attorneys’ fees and other relief deemed appropriate by the court. Moreover, if actual damages exceed liquidated damages, then a plaintiff is entitled under the Act to pursue actual damages in lieu of liquidated damages.
These damage calculations are made and awarded under BIPA on an individual basis. Do the math: If an employer has 100 employees in Illinois and has allegedly been negligent in obtaining required BIPA consent from employees, this can be a potential exposure of an employer to $500,000 in penalties, before you add in the ability to recover attorneys’ fees.
Who is Getting Sued?
The list of companies sued under BIPA spans industries. The initial groups of defendants included companies such as Facebook, Shutterfly, Google, Six Flags, and Snapchat. Also, a chain of tanning salons and a chain of fitness centers were each sued for using biometric technology to identify members. Between July and October, nearly 26 class-action lawsuits were filed in Illinois state court by current and former employees alleging their employers had violated the BIPA. Companies range from supermarket chains, a gas station and convenience store chain, a chain of senior living facilities, several restaurant groups, and a chain of daycare facilities.
Facts vary from case to case, but nearly all of the recent employee BIPA cases implicate fingerprint or palm-print time-keeping technologies that collect biometric data to to clock employees’ work hours. The plaintiffs allege their employers failed to inform employees about the companies’ policies for use, storage and ultimate destruction of the fingerprint data or obtain the employees’ written consent before collecting, using or storing the individual biometric information.
In at least one case, the employee has also alleged fingerprint data was improperly shared with the supplier of the time-tracking machines, and has named that supplier as a defendant as well (Howe v. Speedway LLC, No. 2017-CH-11992 (Ill. Cir. Ct. filed Sept. 1, 2017)).
What Do I Do Now?
In order to avoid becoming the next target, employers with operations and employees in Illinois should ask some basic questions and review processes and procedures:
- First question to ask: are we collecting, storing or using individual biometric data for any purpose?
- If the answer is yes, has your company issued the required notice and received signed releases/consents from all affected individuals? This release/consent should be obtained at the commencement of employment before any collection of individual biometric data begins. Do you have a publically available written policy to cover the collection, storage, use and destruction of the data? The employee handbook is the most logical place for this policy.
- Review your processes: (a) make sure that any collected data is not being sold or disclosed to third parties, outside of the limited exceptions permitted by the Act, and this includes vendors and third party suppliers of biometric technology who process and store the information in a cloud-based service, and (b) make sure that you evaluate your internal data privacy protocols and processes for protecting this new data set, and be prepared to prove that you have “reasonably sufficient” security measures in place for the individual biometric data.
- Review your vendor processes: If a vendor has access to the individual biometric data (such as a software-as-a-service provider), make sure the vendor has sufficient data privacy protocols and processes in place and that you have representations regarding this protection from the vendor.
- Review insurance coverage for this type of exposure with your broker.
- Remember the data breach issues: Make sure your data breach policies recognize that individual biometric data is considered personal information under Illinois laws addressing data breach notification requirements. Refresh your review of the Mintz Matrix, and include this type of personal information in your incident response plan.
If you have questions, contact your Mintz Levin attorney or a member of the Mintz Levin Privacy team.