The Seventh Circuit U.S. Court of Appeals has held that Section 301 of the Labor Management and Relations Act (LMRA) preempted a cause of action under the Illinois Biometric and Information Privacy Act (BIPA) because the complaint was based on an alleged failure to obtain proper consent, and the issue of consent was covered by a collective bargaining agreement between the defendant and the union representing the plaintiffs (Fernandez v. Kerry, Inc., No. 21-1067, 7th Cir. 2021).
Five former employees of Kerry, Inc., filed a class action suit against their former employer in state court under Illinois’ BIPA, which requires private entities to obtain consent before collecting or using biometric information, including fingerprints. Plaintiffs allege that Kerry did not obtain their permission before requiring workers to use fingerprints to clock in and out.
Kerry removed the case to federal court and asked the district court to dismiss the suit under §301 of the LMRA. It argued that resolution of the case depends on the interpretation of collective bargaining agreements between Kerry and the union that represented the plaintiffs while they worked there, and federal law prevents states from interfering in disputes between unions and private employers. The district court ruled in Kerry’s favor and dismissed the suit.
The Court of Appeals affirmed the district court’s ruling, relying primarily on its decision in Miller v. Southwest Airlines Co., 926 F.3d 898, 903–05 (7th Cir. 2019). In Miller, the court found that under provisions of the Railway Labor Act parallel to §301 of the LMRA, workers cannot bypass their unions and engage in direct bargaining with their employers about how to clock in and out. Moreover, BIPA did not attempt to give unionized workers the privilege to bargain with employers directly, as it explicitly permits an employee’s “legally authorized representative” to consent to the collection and use of biometric data. If an employer asserts that the union has consented, any dispute must be resolved between the union and the employer. If an employer “plausibly contends” that the union has consented, that suffices to prevent lawsuits by individual employees.
Quoting Miller, the Court noted that “whether the unions did consent to the collection and use of biometric data, or perhaps grant authority through a management-rights clause…and whether employers may use third parties to implement timekeeping and identification systems, are topics for bargaining between unions and management.” States cannot bypass federal law and authorize negotiation or litigation between individual workers and management.
The Seventh Circuit rejected plaintiffs’ argument that the LMRA is “more permissive” than the Railway Labor Act, noting that SCOTUS has “equated the two.” Moreover, it noted that regardless of whether a subject is permissive or “mandatory” (meaning employers must bargain about it on the union’s demand), the union is the workers’ exclusive agent, and workers cannot insist that management bypass the union and negotiate with them directly about these matters. Noting that the collective bargaining agreement in question did not permit workers to demand arbitration if the union had declined it, the court further declined to send the dispute to arbitration, as the plaintiffs requested. The court noted that it was not “authorized to usurp the union’s authority” to decide whether arbitration was necessary, and plaintiffs had not alleged that the union had violated its “duty of fair representation.”
Circuit Judge Easterbrook delivered the opinion.
Edited by Tom Hagy and Yamile Nesrala, J.D. for MoginRubin LLP.