The decision yesterday in Liu v. Four Seasons Hotel, Ltd. creates another pitfall and need for employers in Illinois worrying about the Illinois Biometric Information Privacy Act.

We wrote a little while ago about the parade of horribles unleashed by the Illinois Supreme Court in determining that an actual injury is not necessary to receive the liquidated damages available under the Illinois Biometric Information Privacy Act.

Fingerprints are likely the way most employers might be in violation. Time clocks, door locks and other 21st Century revamps of 20th Century employment practices incorporate useful updates like accepting fingerprints or retinal scans, and the Act covers a multitude of biometric data that can result in a violation if employers don’t obtain waivers and consents.

And now, this. An Illinois Appellate Court has just ruled that it is a privacy statute, not a wage and hour statute. So an employment agreement incorporating an arbitration provision that applies to “wage and hour violations” and not “privacy suits” won’t allow an employer to push an otherwise liquidated damages threatening class action into arbitration.

That’s what happened in the Four Seasons case. The employees of the hotel brought a class action alleging the hotel had violated their rights under BIPA by collecting fingerprints for timekeeping purposes. The hotel countered saying the employees had agreed to arbitrate disputes and wanted their claims moved to that forum. But the arbitration provisions in the employees agreements said that arbitration provision covered four types of employment disputes:

1) employment discrimination,

2) harassment as it relates to employment,

3) wage or hour violations, and

4) termination of employment from the hotel.

Note that “privacy rights laws” or “other statutory claims” are absent from the list of selected disputes.

The Appellate Court held that BIPA is “a privacy rights law that applies inside and outside the workplace.” So when the hotel argued that this suit was included in the chosen set of arbitrable disputes as a wage and hour claim, the Court disagreed. “Simply because an employer opts to use biometric data, like fingerprints, for timekeeping purposes does not transform a complaint into a wages or hours claim.” In ruling this way, the Appellate Court upheld the trial court decision that the employees were not subject to arbitration.

The Takeaway: In addition to following our guidance from before about this Act, employers who believe they’ve circumvented the problem of hefty liquidated damages in a class action ($1,000 per employee plus attorneys’ fees) by having arbitration provisions that encompass employee claims need to review those agreements and get them amended if they don’t involve privacy rights suits or BIPA or other statutory actions.