State Law Trends – Illinois

Illinois Supreme Court Opens Door to Enormous Damages Awards for Violation of Biometric Privacy Law

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Authors: Peter Donati, Becky Canary-King

Illinois employers that use biometric timeclocks (such as finger, face, hand, or retina scan timeclocks or entry devices) or collect other biometric information should take action immediately to confirm they are in compliance with Illinois’s Biometric Privacy Act (BIPA). Although BIPA has been in effect in Illinois since 2008, its requirements continue to catch businesses off guard – most recently with the Illinois Supreme Court’s decision in Cothron v. White Castle, issued on February 17, 2023.

The case centered on White Castle’s use of fingerprint scans when employees logged onto their computers. White Castle argued that a BIPA violation only occurred the first time the law was violated by collecting employee biometric information. The plaintiff, on the other hand, argued that a separate violation occurred each time she and fellow employees logged onto their computers with their fingerprint scans. The Illinois Supreme Court agreed with the plaintiff.

For employers using biometric timeclocks, this means that it is a separate violation—and potentially a separate penalty—for each time an employee clocks in and clocks out. With penalties of $1,000 for negligent violations and $5,000 for intentional or reckless violations, liability for companies could be astronomical. As penalties compound, even small employers could face seven-figure damages awards if they have used a biometric timeclock for a number of years. 

In White Castle, the Court found that the company had repeatedly scanned fingerprints of nearly 9,500 employees. With each instance deemed a separate violation, the company estimates the penalties could be as much as $17 billion. The Court rejected the company’s argument that assessment of penalties for each scan would be “annihilative liability” for employers, noting that damages are not mandatory under the language of the statute and that lower courts will still have the discretion to fashion remedies that do not bankrupt defendants. The Court also suggested that it is up to the Illinois legislature to reform the statute if it intended a different outcome. However, these aspects of the ruling may be of limited comfort for employers seeking to negotiate settlements with plaintiffs’ attorneys armed with this decision.

The White Castle decision follows another major BIPA decision, in which the Illinois Supreme Court held in Tims v. Black Horse Carriers Inc. that the statute of limitations for BIPA claims is five years, rejecting the one-year limitations period advocated by the defendant.

These decisions will have significant implications for Illinois employers that use biometric information. If your company uses – or previously used – biometric information (such as finger, face, hand, or retina scan timeclocks or entry devices), it’s critical that you confirm that you are complying with BIPA’s requirements.

Attorneys from our Employment & Executive Compensation Group and Cybersecurity Team are available to help you ensure that your business is compliant with BIPA and help mitigate exposure from past violations.

Illinois Passes Workplace Transparency Act and Other Legislative Changes Intended to Fight Workplace Harassment and Discrimination

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In the latest of a series of major legislative development affecting Illinois employers, Governor Pritzker signed Public Law 101-0221 on August 9, 2019, which includes the new Workplace Transparency Act (the “WTA”) and also makes changes to the Illinois Human Rights Act and various other current laws. The WTA is an outgrowth of the #metoo movement and is intended to prevent harassment in the workplace and ensure incidents of harassment and discrimination are not kept buried from public disclosure, as allegedly happened for many years in the Harvey Weinstein situation. Most provisions of Public Law 101—0221 go into effect on January 1, 2020. The new legislation will impact what sorts of agreements can be put in place with employees, prospective employees, and former employees, how disputes relating to harassment and discrimination can be resolved, the training that must be conducted by employers, and what information about judgments and settlements must be disclosed to the government.

Restrictions on Agreements with Employees, Prospective Employees, and Former Employees

The WTA prohibits “[a]ny agreement, clause, covenant or waiver that is a unilateral condition of employment or continued employment” and that:

  • has the purpose or effect of “preventing an employee or prospective employee from making truthful statements or disclosures about alleged unlawful employment practices” or
  • “requires the employee or prospective employee to waive, arbitrate, or otherwise diminish any existing or future claim, right, or benefit related to an unlawful employment practice to which the employee or prospective employee would otherwise be entitled under any provision of State or federal law….”

The WTA clearly is targeting, in the first place, confidentiality and non-disparagement provisions that are imposed unilaterally by an employer and that purport to bar an employee from disclosing unlawful employment practices and, in the second place, mandatory arbitration agreements, jury waivers, and similar terms imposed unilaterally by employers that make it more difficult for employees to vindicate their rights.

The attempt to restrict the use of arbitration agreements by employers may run afoul of federal law which contains an expressed policy in support of such agreements as stated in the Federal Arbitration Act. This potential conflict between State and federal law likely will be sorted out in future litigation.

Certain Mutual Employment Agreements Qualify for Different Treatment

The WTA sets up two exceptions to the general prohibitions described above. First, an employer is permitted to enter into an agreement that would otherwise violate the WTA if the agreement “is a mutual condition of employment,” is in writing, is supported by “actual, knowing, and bargained-for consideration from both parties,” and does not prevent an employee or prospective employee from: (1) reporting good faith allegations of unlawful employment practices to appropriate federal, State, or local agencies enforcing discrimination laws, (2) reporting good faith allegations of criminal conduct to appropriate federal, State, or local officials, (3) participating in a proceeding enforcing discrimination laws, (4) making any truthful statements or disclosures required by law, regulation, or legal process, or (5) requesting or receiving confidential legal advice.

Settlement and Termination Agreements Also are Treated Differently

The second exception under the WTA involves “valid and enforceable settlement or termination” agreements that include promises of confidentiality related to alleged unlawful employment practices. To qualify for the exception, the following criteria must be met:

  1. “[C]onfidentiality is the documented preference of the employee, prospective employee, or former employee and is mutually beneficial to both parties”;
  2. The employer must provide notice, in writing, of the employee, prospective employee, or former employee’s right to have an attorney review the agreement;
  3. There must be valid, bargained for consideration “in exchange for the confidentiality”;
  4. There must not be a waiver of claims that accrue after the date of the agreement;
  5. The employee, prospective employee, or former employee must be given 21 days to review the agreement; and
  6. “[U]nless knowingly and voluntarily waived,” the employee, prospective employee, or former employee must be given 7 days to revoke the agreement.

It is worth noting that the WTA makes clear that employers can still require individuals to keep allegations of unlawful conduct confidential if they receive complaints or investigate them as part of their job or if they are a participant in an investigation.

New Training Requirements

Also part of Public Law 101-0221, a new provision has been added to the Illinois Human Rights Act that will require employers to provide annual sexual harassment prevention training to employees. The Illinois Department of Human Rights has been directed to produce a model training program, and employers will be able either to use that model program or one of their own that equals or exceeds the minimum standards. Beyond describing the subjects that must be part of the program, the legislation gives few details about how long the training must be, whether it must be participatory, and whether it must be in-person. One helpful part of the legislation is that employers who do not comply with the training requirement will be given a thirty-day period after being cited during which they can provide the training.

Expansion of IDHR Coverage

Besides the new training provision described above, Public Law 101-0221 also expands the Illinois Human Rights Act by adding protection based on perceived membership in a protected class, adding a new definition of “harassment,” providing protection from harassment for nonemployees (i.e., contractors and consultants) who provide services to an employer, and making clear that an employer’s “work environment” is not limited to the physical location to which an employee is assigned. The legislation also makes clear that an employer will not be liable for the harassment carried out by non-managers and non-supervisory personnel unless the employer becomes aware of the conduct and fails to take reasonable corrective measures. This mirrors the treatment under federal law for non-managers and non-supervisory personnel.

New Reporting Requirements

Beginning in July of 2020, employers who have experienced an adverse judgment involving sexual harassment or workplace discrimination in the prior calendar year will be required to make certain reports to the Illinois Department of Human Rights. The Department of Human Rights also will have expanded powers to request settlement information as part of an investigation of a charge. Information shared with the Department of Human Rights will not be subject to Illinois’ FOIA law.

Expansion of VESSA

Finally, Public Law 101-0221 also amended Illinois Victims’ Economic Security and Safety Act (VESSA). This statute protects victims of sexual and domestic violence and certain family and household members from discrimination and gives them certain leave and accommodation rights. With the changes recently enacted, VESSA now also protects victims of gender violence, which is defined as “(A) one or more acts of violence or aggression satisfying the elements of any criminal offense under the laws of this State that are committed, at least in part, on the basis of a person’s actual or perceived sex or gender, regardless of whether the acts resulted in criminal charges, prosecution, or conviction; (B) a physical intrusion or physical invasion of a sexual nature under coercive conditions satisfying the elements of any criminal offense under the laws of this State, regardless of whether the intrusion or invasion resulted in criminal charges, prosecution, or conviction; or (C) a threat of an act described in item (A) or (B) causing a realistic apprehension that the originator of the threat will commit the act.”

What Should Illinois Employers Do Now?

Faced with the above provisions, Illinois employers likely will want to take several steps.

First, because it will be difficult to show that an agreement is “mutual” for purposes of the WTA, employers will want to assume that most agreements signed by employees as a standard condition of their employment are going to be “unilateral.” For these agreements, the safest route will be to carve out an employee’s right to make truthful statements or disclosures about unlawful employment practices and to remove any provisions that might diminish an employee’s right to pursue employment-related claims.

Second, for certain agreements with high-level executives that are truly the product of bargaining and for settlement and termination agreements, to the extent terms are included that otherwise would violate the WTA, employers will want to make sure that the agreements contain appropriate recitations demonstrating that one of the exceptions in the statute would be applicable.

Third, employers will want to make sure they revise their policies and handbooks to reflect the protection of nonemployees from harassment and the changes to VESSA.

Fourth, employers will want to begin planning to conduct annual anti-harassment and discrimination training.

To the extent you have more questions about the WTA and the other provisions of Public Law 101-0221, you should feel free to contact us.

 

Preparing for Legalized Marijuana in Illinois

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This summer, Governor J.B. Pritzker signed into law the Cannabis Regulation and Tax Act (the “Cannabis Act”), which takes effect January 1, 2020. Employers may want to take a look at their policies and procedures as they relate to drug testing their candidates and employees and how they discipline employees who test positive for cannabis.

The Cannabis Act provides that individuals who are 21 years of age or older may lawfully possess, consume, use, purchase, obtain, and transport cannabis for personal use. Notably, however, cannabis continues to be illegal under federal law. While the Cannabis Act legalizes recreational marijuana use, it explicitly allows employers to do the following in order to maintain a safe drug-free workplace:

  • Enforce zero-tolerance or drug-free workplace policies;
  • Implement and enforce employment policies concerning drug testing, smoking, consumption, storage, or use of cannabis in the workplace or while on call, provided that the policy is applied in a non-discriminatory manner; and
  • Prohibit employees from being under the influence or using cannabis in the workplace (this applies to the employer’s premises, including any building, real property, and parking area under the control of the employer, as well as employer vehicles), while performing job duties or while on-call.

Despite these explicitly employer-friendly provisions, the Cannabis Act makes disciplining employees for marijuana-use tricky. Specifically, before disciplining an employee that is perceived to be under the influence or impaired by cannabis, the Cannabis Act states employers must have a “good faith belief that the employee manifests specific, articulable symptoms while working that decrease or lessen the employee’s job performance.”  The Cannabis Act specifies this burden may be met by changes in the employee’s speech, physical dexterity, agility, coordination, demeanor, irrational or unusual behavior, or negligence or carelessness in operating equipment or machinery, disregard for the safety of the employee or others, or involvement in any accident that results in serious damage to equipment or property, disruption of a production or manufacturing process, or carelessness that results in an injury to the employee or others. The Cannabis Act also requires that employers “afford the employee a reasonable opportunity to contest the basis of the determination.”

Perhaps the most complex portion of the Cannabis Act is that it amends the Illinois Right to Privacy in the Workplace Act (“IRPWA”), which prohibits employers from discriminating against employees for their off-duty (legal) behavior. Now, pursuant to the Cannabis Act’s amendment, those behaviors include use of cannabis. Under the IRPWA, employees may file a private right of action and be entitled to not only damages, but also recovery for statutory penalties, attorneys’ fees and costs, where an employer takes adverse action for the employee’s off-duty and off-premise cannabis use.

The reason this poses a particular challenge for employers is because there are no existing drug tests that can test when someone last used marijuana. For example, a positive marijuana test may only mean that the employee used marijuana while off-duty and off-premises days (or weeks) ago – not that the employee used (or is impaired) while at work. Or it could mean the employee is still impaired. There’s no way to know solely based off a cannabis test.

Best Practices for Employers to Put into Effect Now

In preparation, employers should consider taking the following actions now:

  • Review existing drug testing policies, update policies accordingly and train managers and supervisors regarding any policy changes.
  • Develop discipline policies specifically for cannabis use and train managers and supervisors on the appropriate grounds for discipline and procedural requirements for discipline.
  • Develop specific procedures for documenting concerns that an employee is under the influence of cannabis.
  • Train managers and supervisors on the specific cannabis use/impairment symptoms referenced in the Cannabis Act and how to document those observations in order to provide evidentiary support of “good faith.”
  • Review/revise policies with respect to pre-employment applicant drug testing.

Illinois Strengthens Equal Pay Protections

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Illinois has joined the growing list of states implementing requirements intended to avoid pay discrimination. These requirements, which are effective September 29, 2019, include a new salary history ban, a lessening of the evidentiary burden to prove pay discrimination, strengthened anti-retaliation provisions, and additional damages available to employees.  Employers need to act quickly to ensure that candidates aren’t asked about compensation history, and otherwise comply with these new standards.

The 2019 Amendments to the Illinois Equal Pay Act prohibit Illinois employers from:

  • Screening job applicants based on their salary history
  • Requesting or requiring salary history
  • Otherwise requesting or requiring applicable to disclose salary history information
  • Seeking an applicant’s salary history information from current or former employers (unless it is public record).
  • Considering or relying on compensation history voluntarily provided (without prompting) in deciding whether to offer employment , in making an offer of compensation, or in determining future compensation.

The Amendments make clear that employers may engage in discussions with applicants about their expectations with respect to compensation and benefits, but it’s critical that those conversations are forward – not historically – focused.

The amended IL EPA also makes it easier for employees to prove claims of pay discrimination – both because it expands the group of individuals the employee can compare herself to in making her claim, and because it narrows the grounds on which an employer can justify a difference in pay.

Finally, the Amendments beef up the Illinois Equal Pay Act’s retaliation provisions.  The IL EPA previously provided that Illinois employers should not interfere with, restrain or retaliate against employees who wish to inquire about, disclose, compare or discuss their wages or the wages of other employees.  The Amendments go even further though – prohibiting employers from requiring an employee to sign an agreement that would prohibit them from disclosing or discussing their pay information.

Employees bringing claims under the IL Equal Pay Act will still have five years to bring their claims, and they will still be entitled to recover the entire amount of any underpayment with interest.  But under the Amendments, they will now also have the opportunity to seek compensatory damages in certain situations, as well as punitive damages, injunctive relief and attorneys’ fees.

Illinois employers need to take immediate action to ensure that those involved in the hiring process do not inadvertently violate the new salary history ban.  We recommend implementing a policy that requires that only one or two set individuals are authorized to discuss money with candidates, and that those individuals be trained to only ask about expectations, not salary history.  In addition, in light of the soon-to-be reduced standards for proving pay discrimination, Illinois employers should consider conducting a self-audit to identify – and resolve – any pay inequality before a claim arises.

Wisconsin becomes the latest “right-to-work” state

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wisconsin-webOn March 9th, Wisconsin passed right-to-work legislation banning collective bargaining agreements that require private-sector workers to pay labor fees. The law, which makes Wisconsin the 25th state to pass such legislation, becomes effective immediately.

The legislation bans “union security clauses” — clauses that provide for the termination of an employee who fails to join and pay labor fees to the union — from being included in collective bargaining agreements.

Although this type of legislation started in the southern and western states, in recent years, Indiana and Michigan, traditionally union-friendly states, passed similar right-to-work laws. This type of legislation has proven to reduce state-wide union membership.

It seems unlikely that Illinois will implement right to work legislation in the private sector (at least with the current makeup of the legislature), but it is definitely on the forefront in the public sector.  Last month, Illinois governor, Bruce Rauner, announced a controversial executive order that would prohibit unions from requiring state workers to pay union fees.

2015 Check-In – Have you updated your policies and documents?

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Echeckarlier this year, we posted a checklist outlining key issues and action items for compliance in 2015. With the first quarter coming to a close, we want to remind you of a few important items from that checklist that required changes to your policies and practices, as well as alert you to a new item that requires immediate action.

Change FMLA policy to reflect same-sex spouses.

Effective March 27, 2015, the definition of “spouse” under the FMLA will be amended so that an eligible employee in a legal same-sex marriage will be allowed to take FMLA leave for his or her spouse. Make sure that you change your FMLA policies and practices to reflect this new definition.

Confirm employment applications and processes comply with “Ban the Box.”

As of the first of this year, Illinois employers must wait until an interview has been granted (or, if no interview, until a conditional offer of employment has been made) before asking about criminal history. New Jersey’s new law, effective earlier this month, requires companies to wait even longer. Employers hiring in these states — as well as in other states with similar laws — should ensure that employment applications do not contain criminal background questions and that questions regarding criminal background are not asked until it’s legal to do so.

Comply with new Illinois pregnancy accommodation rules and notice requirements.

As of January 1st, Employers in Illinois are required to provide reasonable accommodations to pregnant employees and applicants who ask for them, to post a notice in the workplace regarding pregnancy accommodation rights, and to include language relating to such rights in their handbooks. Make sure your team is aware of these requirements and that any necessary changes to policies and practices have been made.

Illinois Enacts Secure Choice Savings Program

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Illinois Secure Choice Savings ProgramOn January 4, 2015, outgoing Illinois Governor Patrick Quinn signed The Illinois Secure Choice Savings Program Act, requiring any business in operation for at least two years that has 25 employees or more in Illinois, and that does not have a qualified retirement plan, to offer its employees an individual retirement savings plan by June 1, 2017.

Covered employers will be required to enroll employees into a newly created, state-sponsored Roth IRA program that comes with a default 3% payroll deduction contribution. Employers will not be required to contribute. Employees will be able to choose a different contribution amount or opt out of the program entirely, though supporters say they expect most employees who currently have no retirement savings option at work will choose to participate.

None of this will happen immediately. The Act contains only an outline of the program and provides for a board to be appointed that will design the final program during a planned 24-month startup period. But before the board can take significant action, it must obtain start-up funding for the program, through future state appropriations or donations. Once the board obtains funding and designs the program, employers will have nine more months to enroll employees before facing penalties.

We will keep you informed once solid information and directives are available.

The Courts Continue to Debate Restrictive Covenant Enforcement in Illinois – UPDATED 2/20

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From time to time, other attorneys with our firm will contribute blog posts on items that may be of interest to members of the labor and employment law community. Today, we are fortunate to have a post contributed by Jason Hirsh, a partner in Levenfeld Pearlstein’s Litigation Group. Jason’s post discusses current Illinois cases at the forefront of labor and employment law that frequently come up when employers draft, or seek to enforce, restrictive covenants in their employment agreements in this changing legal climate . . .

employent contract

Courts in Illinois are in the midst of a significant legal debate relative to whether a post-employment restrictive covenant involving an at-will employee can be enforced if the employee has less than two years of continued employment. This two-year bright line rule first blossomed in the often cited Fifield v. Premier Dealer Servs., Inc., 373 Ill.Dec.379 (1st Dist. 2013) decision. The debate continues to play out in the Chicago federal court.

In Montel Aetnastak, Inc. v. Miessen, 998 F.Supp.2d 694, 716 (N.D. Ill. 2014), Judge Castillo refused to apply the two-year bright line rule presumably adopted in Fifield. Judge Holderman, on the other hand, in Instant Technology, LLC v. Defazio, 12 C 491, __ F.Supp.2d __, 2014 WL 1759184 at *14 (N.D. Ill. 2014), took a contrary view.

On February 6, 2015, in Bankers Life and Casualty Company v. Richard Miller, et al., Case No. 14 CV 3165, Judge Shah waded into this controversy and rejected the two-year bright line rule. Instead, Judge Shah concluded that not only has “the Illinois Supreme Court not spoken on this issue”, but that case law does not support the argument that two years of employment is “necessary” to support a restrictive covenant.

This is a critically important issue affecting employers. Given the obvious uncertainty in the area of restrictive covenant enforcement, we recommend other forms of consideration, such as bonus payments, be considered.

Read the Bankers Life and Casualty Company v. Richard Miller, et al., Case No. 14 CV 3165 decision.

UPDATE (2/20/15) 
On the heels of Bankers Life, on February 13, 2015, in Cumulus Radio Corp. v. Olson, et al., Case No. 15-cv-1067 (C.D. Ill.2015), Judge McDade of the federal court in Peoria, Illinois granted an employer’s motion for a temporary restraining order stating “the Court does not believe that the Illinois Supreme Court would adopt the bright-line test announced in Fifield.”  Judge McDade added that the two-year bright line rule “suffers from a number of analytical problems that make it unsatisfying.”  Judge McDade also stated it also suffers from a “failure to give weight to the reason that an employee’s at-will employment ended.”  Favoring a case-by-case analysis, akin to that suggested by Bankers Life, Judge McDade further criticized the two-year bright line rule stating “[s]uch a rule is overprotective of employees, and risks making post-employment restrictive covenants illusory for employers subject completely to the whimsy of the employee as to the length of his employment.”

 

Amendments to Illinois Eavesdropping Statute Signed Into Law

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IMG_1128On December 30, 2014, former Illinois Governor Pat Quinn signed into law a revised version of an eavesdropping statute that the Illinois Supreme Court had struck down as unconstitutionally overbroad last March. Under the revised law, it is a criminal act to record a private conversation or to intercept, record, or transcribe a private electronic communication without the consent of all parties to the communication. The law defines private as any oral or written communication between two or more people in which the parties have a “reasonable expectation” that the communication will remain private. Previously, recording anyone in Illinois (even in public) was illegal without permission.

Employers should implement policies prohibiting nonconsensual recording of private workplace conversations and beware of taping interviews, telephone conversations, investigatory interviews, disciplinary meetings, or any workplace conversations—even for legitimate business reasons—if consent of all parties is not obtained or there is an argument that the communications being made are private. Employers are encouraged to work with legal counsel to ensure their policies and practices do not conflict with National Labor Relations Board rules by restricting employees’ right to record non-private conversations in the workplace. Also, employer policies relating to employee use of company email systems need to ensure that employees do not have a “reasonable expectation” in the privacy of personal communications sent over those systems.

Reminder – Immediate Action Required Under New Illinois Pregnancy Rights Provisions

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IDHR_Logo_2On January 1, 2015, Illinois Human Rights Act amendments providing additional rights to pregnant employees will take effect. (See our previous post for more in-depth information)

As previously mentioned, the law will require some immediate steps by employers.  Employers must post a government-provided notice where other mandated posters are displayed, (download here in English and Spanish), and update employee handbooks with a summary of pregnant employees’ new rights.