It looks as of late that conclusions about the scope of the Illinois Biometric Data Privacy Act (BIPA) and insurance plan coverage for those promises have been coming as fast as finger scan. Fresh off the heels of Thermoflex and Caremel just prior to that, this week the Illinois District Courtroom for the Northern District of Illinois in Condition Automobile. Mut. Ins. Co. v. Tony’s Finer Food items Enterps., Inc. held that the employment related procedures exclusion in Coverage B of a standard legal responsibility coverage policy did not preclude coverage for a BIPA assert.
Background. The insured, Tony’s Finer Foodstuff, was a grocery retailer chain with numerous destinations in the Chicago metropolitan spot. Tony’s allegedly normally takes the fingerprints of every staff it hires, and then calls for workers to use their fingerprints to clock in and out of work. See 2022 WL 683688, at *1 (N.D. Ill. Mar. 8, 2022). In December 2018, Figueroa, a former worker, sued Tony’s alleging that the use of personnel fingerprints violated BIPA. Tony’s sought protection beneath its normal legal responsibility and employment methods liability procedures. Protection litigation ensued in relationship with the general liability guidelines, and the get-togethers cross-moved for summary judgment.
In the wake of West Bend, the provider withdrew its argument that the underlying litigation did not entail a “publication” within just the that means of the policy’s “personal and promotion injury” coverage while, we take note that the impression does not reveal specifically why. Id. at *3. (The carrier also withdrew its argument that the Recording and Distribution of Materials exclusion applied.) The general liability insurance provider instead argued that there was no obligation to defend for the reason that of the Protection B employment connected procedures (ERP) exclusion as very well as because of late notice, which we do not tackle in this article. Id. at *4.
The ERP exclusion prohibits protection for “personal and advertising and marketing injury” to:
- A individual arising out of any:
(a) Refusal to employ that particular person
(b) Termination of that person’s employment or
(c) Employment-related techniques, guidelines, functions or omissions, this kind of as coercion, demotion, evaluation, reassignment, willpower, defamation, harassment, humiliation, or discrimination directed at that human being
Id. at *5. Examining both equally the “architecture” of the exclusion and the words utilized under the doctrines of noscitur a sociis and ejusdem generis (to a substantially lesser extent), the courtroom held that the exclusion did not utilize.
Starting its assessment, the court docket conceded that, at first blush, the ERP exclusion appeared to use:
At 1st glance, one particular could imagine that the exclusion applies to a BIPA circumstance about how workers clock-in and clock-out of perform. Tony’s had a “practice[ ]” for recording the time worked by its employees. They experienced to use their fingers to sign in and sign out. That is a practice, and the exclusion looks to deal with methods. So the exclusion seemingly applies.
Id. at *5.
Even so, irrespective of the reading’s “surface enchantment,” the court docket concluded that, “based on a closer browse, the text and framework of the exclusion reveal that it does not extend to claims involving BIPA.” Id. Thinking of the “architecture” of the exclusion – i.e., that it “comes in 3 subparts … claims about (1) a refusal to hire (2) termination and (3) a get-bag of other employment-related perform,” the court concluded that the third subpart was described by the initial two. The courtroom reasoned:
That [third] provision does not arrive out of nowhere. It is the 3rd section of a trilogy, and the first two provisions coated selecting and firing. That context sheds light-weight on the that means of the 3rd provision. It implies that the provision applies to an adverse work action, not any and all promises about some thing that transpires at get the job done. The framework of the language indicates that it needs a adjust in work standing or other destructive cure directed at the personnel.
Id. at *6.
According to the court docket, the doctrines of noscitur a sociis and ejusdem generis further underscored this summary. Observing that “[y]ou can convey to a good deal about phrases, like individuals, by who they hang out with,” the courtroom concluded that practice of gathering and making use of fingerprint scans did not in shape with the techniques and behaviors enumerated in subparagraph (c) of the exclusion. Id. at *7. The court docket characterized the provision as “a laundry record of targeted steps towards an personnel,” and concluded that “[e]verything in that list implies a alter in an employee’s standing, or qualified mistreatment of a particular man or woman – that is, conduct “directed at that human being.” Id. (emphasis in orginal).
Believe about it this way. If anyone ended up to insert “fingerprinting” to the checklist, it would adhere out like a sore thumb. It is, in some sense, a practice. But it is a categorically different sort of exercise than every little thing else in the listing. The other objects contain mistreatment that is qualified at a unique employee in a immediate, particular way. They entail dealing with a particular particular person badly. Adding fingerprinting to the checklist phone calls to thoughts the line from a vintage Sesame Street tune: “one of these points is not like the some others / 1 of these matters just won’t belong.” See Sesame Road, One particular of These Factors (Is Not Like the Other folks) (Columbia Data 1970).
Id. at *7.
Acknowledging the intra-district split, the courtroom concluded that construction of the ERP exclusion was this kind of to limit its application to a subset of employment related prartices and not to all work related techniques:
Making use of a finger to clock-in and clock-out is a follow or a coverage, in a colloquial sense. But it just isn’t the variety of practice or policy envisioned by the full text of the provision. To the extent that there is any ambiguity, the tie goes to the insured.
Id. at *9.
What this situation suggests. For the next time in a 7 days, the Illinois federal courtroom (Northern District of Illinois) has rejected software of the ERP exclusion in the context of underlying fingerprint scan BIPA claims, and in accomplishing so, have turned down Caremel.
But we believe the true prospective influence of this situation is on a broader level. In the program of two months, the Northern District of Illinois has rendered a few BIPA coverage choices: one particular has utilized the ERP exclusion, two have rejected it, and two have turned down the Unauthorized Entry or Disclosure of Personalized Info exclusion. In addition, Thermoflex rejected the Recording or Distribution of Substance exclusion, when the provider in Condition Farm Auto withdrew its argument that the exclusion applied. Id. at *3 n.1. Just about every determination included underlying fingerprint scans. From a precedential price, as federal trial court docket choices, individually each individual has none. Collectively, nonetheless, may possibly be a further make any difference. We believe that the typical thread of logic and reasoning discussed in them – that the doctrines of noscitur a sociis and ejusdem generis – stop the software of these exclusions will have a substantial persuasive impression on upcoming conclusions. Carriers should get heed.