United States: Hazards Ahead: Uptick In Biometric Privacy Laws Can Put Employers In Hot Seat

Last Updated: October 10 2017
Article by Karla Grossenbacher and Christopher W. Kelleher

Seyfarth Synopsis:  A string of recent class action lawsuits regarding businesses' use of employees' biometric data should put employers on heightened alert regarding compliance with various state biometric privacy laws.

As biometric technology has become more advanced and affordable, more employers have begun implementing procedures and systems that rely on employees' biometric data. "Biometrics" are measurements of individual biological patterns or characteristics such as fingerprints, voiceprints, and eye scans that can be used to quickly and easily identify employees.  However, unlike social security numbers or other personal identifiers, biometrics are biologically unique and, generally speaking, immutable.  Thus, unlike a bank account or a social security number, which can be changed if it is stolen, biometric data, when compromised, cannot be changed or replaced, leaving an affected individual without recourse and at a heightened risk for identity theft.  Given the serious repercussions of compromised biometric data, a number of states have proposed or passed laws regulating the collection and storage of biometric data.  And plaintiffs' attorneys are taking notice, as the number of class action lawsuits in this area has surged in recent months.

Currently, there are three states that have statutes regulating the collection and storage of biometric data: Illinois, Texas, and Washington.  In 2008, Illinois passed the Biometric Information Privacy Act ("BIPA").  Texas followed suit in 2009, and Washington passed its biometric privacy law in 2017.

Covered Biometric Data. All three laws place restrictions on the collection and storage of "biometric identifiers," such as eye scans, fingerprints, and voiceprints. However, BIPA and the Washington law also cover data that is converted into some type of code or template.  In addition to biometric identifiers, BIPA applies to "biometric information" which is "any information, regardless of how it is captured, converted, stored, or shared," that is "based on an individual's biometric identifier" and is "used to identify an individual."  The Washington law places restrictions on the "enrollment" of biometric identifiers, which is defined as "capturing" a biometric identifier or "convert[ing] it into a reference template."  Therefore, in Illinois and Washington, if an employer converts an employee's biometric identifier into a mathematical code or other template and retains only the code or template and not the underlying biometric data, the employer must still meet the laws' requirements with respect to the collection and storage of that information.  The Texas law only protects biometric identifiers and does not contain a broader "biometric information" provision.

Notice and Consent. All three laws require employers to provide notice and obtain consent before collecting and storing biometric data. BIPA requires the employer to obtain a "written release," but the Texas and Washington laws do not specify that consent must be given in writing.  BIPA further specifies that, in the employment context, a written release is one  "executed by an employee as a condition of employment."  This language is significant for employers who routinely collect and store biometric information of employees and are struggling with what to do if an employee refuses to provide consent.

Washington's law also contains an exception the others do not: The law's notice and consent provisions do not apply to biometric data collected and stored by an employer for "security purposes," which is defined in the statute as biometric data that is stored for "the purpose of preventing shoplifting, fraud, or any other misappropriation or theft of a thing of value."

Standard of Care. All three laws require that employers exercise reasonable care to protect biometric data: BIPA specifies that employers should use a "reasonable standard of care within the industry, and in a manner that is the same as or more protective than the manner in which the business stores, transmits, and protects other confidential and sensitive information."  The Texas law similarly requires employers to store, transmit, and protect the data from disclosure using reasonable care and in the same way the company treats other confidential information. Washington's law requires employers to take reasonable care to guard against unauthorized access to and acquisition of biometric data.

Retention. Each of the laws has requirements concerning when, and in some cases how, the biometric data must be destroyed: BIPA's requirements are the strictest, dictating that employers must establish a written, publicly available policy that contains a retention schedule for biometric data and guidelines for "permanently" destroying the data.  BIPA has the most stringent retention requirements in that it states the information must be destroyed when the purpose for obtaining such data has been satisfied or within three years of the individual's last interaction with the employer, whichever occurs first.  The Texas law requires only that employers destroy biometric data "within a reasonable time," but not later than one year after the biometric data is no longer needed.  In Texas, if biometric data was collected for "security purposes," the purpose for collecting the data is presumed to expire on termination of the employment relationship.  Finally, Washington's law requires employers to retain biometric data "no longer than is reasonably necessary" to comply with certain legal requirements and to provide the services for which the biometric data was collected.

Cause of Action. All three laws provide civil penalties for violations, but BIPA is the only one of the three laws that provides a private right of action that allows for plaintiffs to recover liquidated damages and attorneys' fees. In Texas and Washington, only the state attorney general may bring suit to enforce those laws.  It is this distinction that accounts for the fact that lawsuits filed under the Illinois law have been grabbing headlines as of late.

Biometric Data in the Other 47 States. Several other states (including Alaska, Massachusetts, Montana, and New Hampshire) have introduced similar legislation with varying levels of success. But even in states where no law governing the collection and storage of biometric data exists, employers should still take caution when collecting and storing biometric data because the practice could lead to invasion of privacy or negligence claims.

Best Practices. In addition to obtaining prior written consent from employees for the collection and storage of biometric data, employers should consider doing the following:

  1. Have a written policy in Illinois and distribute to employees along with the written release form. BIPA requires a business in possession of biometric data to have a publicly available, written policy stating the business's retention schedule for the data and rules governing its destruc­tion — and the business must adhere to such policy. Thus, employers in Illinois need to make sure they have such a policy.
  2. Ensure biometric data is not sold or disclosed. All three laws generally prohibit a business from selling, leasing, or otherwise disclosing biometric data it collects or possesses. Companies should ensure that neither the company nor any vendor storing biometric data on the company's behalf sells or discloses the data in violation of these laws. The laws contain exceptions to this prohibition on disclosure where the individual consents to the disclosure, the disclosure completes a financial transaction requested by the individual, or the disclosure is permitted by law, order or warrant. Again, outside of Texas, Washington, and Illinois, reasonableness would dictate that an employer should not disclose an employee's biometric data to others without consent under an invasion of privacy or negligence analysis.
  3. Have protocols for protecting biometric data. Employers should protect biometric data in the same manner as they do with other confidential and sensitive information in their possession. Protocols for protecting biometric data can be covered in a general information security policy or in a specific biometric data policy.
  4. Have appropriate provisions in vendor contracts to protect biometric data. In contracts with vendors who store or collect biometric data on behalf of an employer, employers should require that the vendor comply with applicable laws governing the collection and storage of biometric data and provide the same level or higher level of protection to the data that the employer does. The employer should also retain the right to request information on the vendor's information security protocols, conduct periodic audits of the vendor's security protocols, and to be notified in the event of any breach or suspected breach of the biometric data the vendor holds for the company (regardless of whether such notification is required by a breach notification statute).
  5. Comply with applicable data breach notification statutes in the event biometric data is compromised. Biometric data is considered "personal information" under a number of state data breach notification laws, including Illinois, Iowa, Nebraska, New Mexico, North Carolina, Wisconsin and Wyoming. Employers storing biometric data (and their vendors) must follow the requirements of these laws with regard to informing affected individuals of breaches/suspected breaches.

With biometric privacy legislation pending in Massachusetts and New Hampshire, and the passing of a biometric privacy law in Montana in 2018 a virtual certainty, we have only just begun to see the impact of this type of privacy legislation. Stay tuned.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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