18th Annual Workplace Class Action Report - 2022 Edition

Annual Workplace Class Action Litigation Report: 2022 Edition 679 meant that it only received payment after the trial offer period concluded. Id. at *5. The Court rejected this argument. It opined that the free previews were part of the efforts to sell product. The Court further determined that the product was Defendant’s database, and Plaintiff’s identity was being used to sell that product. The Court thus ruled that Plaintiff sufficiently stated a claim for relief based on alleged violations of the IRPA. Id . at *9. The Court explained that Plaintiff alleged that Defendant used her identity in the free previews to advertise, promote, and offer for sale its monthly subscription for its database. Id . Accordingly, the Court denied Defendant’s motion to dismiss. Sosa, et al. v. Onfido, Inc., 8 F.4th 631 (7th Cir. 2021). Plaintiff, a user of the marketplace application OfferUp, registered his identity to become a verified user on the app, which required him to go through a process using the app’s TruYou feature with technology provided by Defendant. Plaintiff filed a class action alleging that Defendant violated the Illinois Biometric Information Privacy Act (“BIPA”) by using facial recognition technology to collect his biometric identifiers without his consent. Defendant filed a motion to compel arbitration of Plaintiff’s claims pursuant to an arbitration agreement included in the Terms of Service contract between Plaintiff and OfferUp. The District Court denied Defendant’s motion. On appeal, the Seventh Circuit affirmed the District Court’s ruling. Defendant admitted that it was not a party to the agreement, but argued that it was entitled to enforce the arbitration clause under the third-party beneficiary, agency, and equitable estoppel non-party enforcement theories. The District Court held that Defendant failed to establish that it was a third-party beneficiary of the Terms of Service because the agreement did not specifically name it as an intended beneficiary of the contract nor indirectly identified it as such by describing a class to which it belonged. Id . at 636. Further, the District Court reasoned that Defendant also failed to show that it was an "affiliate" of OfferUp to qualify as an OfferUp provider under the Terms of Service. The District Court additionally held that Defendant could not enforce the Terms of Service as an agent of OfferUp because no evidence supported that OfferUp controlled Defendant’s activities, or that it authorized Defendant to conduct legal transactions in OfferUp’s name. Id . Finally, the District Court found that Defendant failed to show that it detrimentally relied on the Terms of Service’s arbitration clause such that Plaintiff should be barred from contesting its invocation of that provision. Id . at 637. The Seventh Circuit agreed with the District Court that nothing in the Terms of Service designated Defendant as a third-party beneficiary of that contract, and the record was devoid of evidence establishing that Defendant was an agent of OfferUp, or that Plaintiff should be equitably estopped from contesting Defendant’s right to enforce the arbitration provision. Id . Therefore, the Seventh Circuit held that Defendant failed to establish any right to enforce the arbitration provision as a non-party to the Terms of Service. Id . at 634-35. Accordingly, the Seventh Circuit affirmed the District Court’s ruling. Starts, et al. v. Little Caesar Enterprises, Inc., 2021 U.S. Dist. LEXIS 209669 (N.D. Ill. Oct. 19, 2021). Plaintiff filed a class action alleging that Defendant violated various provisions of the Illinois Biometric Privacy Information Act (“BIPA”). The Court granted Defendant’s motion to staying pending the decisions in McDonald v. Symphony Bronzeville , Case No. 126511 (Ill. Sup. Ct.), Tims v. Blackhorse Carriers, LLC , Case No. 20-0563 (Ill. App. 1st Dist.), and Cothron v. White Castle Systems, Inc ., Case No. 20-3202 (7th Cir.). Plaintiff asserted that Defendant violated the BIPA by: (i) capturing and collecting biometric identifiers and information relative to Plaintiff and the proposed class members without first obtaining their consent or informing them in writing why Defendant was collecting the data or how long it would be kept; (ii) failing to create a written policy establishing a retention schedule and destruction guidelines for its possession of the data; and (iii) disseminating the data to Defendant’s timekeeping vendor without consent. Id . at *2. Defendant argued that the decision in McDonald will resolve whether the BIPA claims brought by employees against their employers were preempted by the Illinois Workers’ Compensation Act, the decision in Tims would decide whether a one-year or five-year statute of limitations applies to claims under the BIPA; and the decision in Cothron would decide whether claims brought under § 15(b) and (d) of the BIPA accrue each time a person submits a biometric scan or only the first time. Id . at *3. Defendant contended that all of these decisions would impact Plaintiff’s action. The Court agreed that staying the case pending the decisions would simplify and streamline further proceedings and reduce the burden of litigation on the parties and the Court during the class certification phase and beyond. The Court therefore concluded that staying the case pending the outcomes of McDonald , Tims and Cothron would significantly advance judicial economy and spare the parties the burden of unnecessary briefing, without causing any significant hardship to Plaintiff. For these reasons, the Court granted Defendant’s motion to stay.