Data privacy class action: $6.9M settlement agreement puts employers on notice

Earlier this spring, we gave you the top five employment law changes to closely monitor in 2023, and data privacy regulations made our short list.

Now, a proposed $6.9 million class-action settlement to resolve data privacy claims verifies that the issue needs to be on your radar.

Data privacy class-action focuses on consent

An employee filed a class-action lawsuit against Little Caesars, alleging the company violated the Illinois Biometric Information Privacy Act (BIPA) by using a timekeeping system that scanned employees’ fingerprints without obtaining their informed consent.

As an FYI, BIPA regulates how employers can use employees’ biometric identifiers (e.g., a retina scan, fingerprints, voiceprints, scans of hand or face geometry) used in the course of business. For example, time management systems, security systems and health plans may collect, use and store biometric identifiers.

Among other things, BIPA requires employers to: 1) inform employees that biometric identifiers are being used, collected or stored, and 2) obtain employees’ written consent before obtaining their biometric identifiers.

Litigation was temporarily stayed in the case to allow the Illinois Supreme Court to weigh in on key BIPA issues. Relevant here, the statute does not provide a limitations period. The state’s high court clarified that a five-year limitations period applies to BIPA claims and that a new accrual period begins each time an employee’s biometric info is scanned without consent.

Little Caesars denied the claims presented in the action. It clarified that it agreed to settle the case to “avoid the risk” of statutory damages under BIPA.

As an FYI, BIPA is one of the most restrictive state laws regarding data privacy – and it has pretty sharp teeth. Under BIPA, employers can face $1,000 in liquidated damages per violation and $5,000 for intentional or reckless violations.

Under this proposed settlement, the company agreed to pay $6,997,810 into a settlement fund which will be used to pay:

• Settlement claims for an estimated 8,407 class members – employees who “enrolled in or used a finger-scan timekeeping system” while working at Little Caesars in Illinois between Jan. 29, 2014, and 14, 2019.
• Settlement administration costs, not to exceed $35,000
• The class members’ attorneys’ fees, and
• A service award, up to $15,000, to the settlement class representative for time spent pursuing the action.

Info: Proposed settlement in Starts v. Little Caesar Enterprise, Inc., No. 1:19-cv-01575 (N.D. Ill. filed 9/1/23).