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We still have a few sponsorship slots available. Chamber Day is a great way to get in front of lawmakers and meet local business leaders. The Chamber is grateful to all our sponsors- We can’t do what we do without your support. Sponsorship information can be found HERE
BIPA Update: Painful Supreme Court Decision in Cothron v. White Castle
“Flagging how catastrophically bad this is for business” was how one preeminent appellate attorney described last Friday’s Illinois Supreme Court ruling.
Our friends at Mayer Brown, who drafted the Chamber’s amicus brief, provided a nice summary of what this decision means:
In what is becoming a pattern, the Illinois Supreme Court recently issued another decision interpreting the Biometric Information Privacy Act (“BIPA”) to expand potential liability for businesses. The court held in Cothron v. White Castle that each time a business collects or discloses an individual’s biometric data without first obtaining BIPA-compliant consent (for example, each time an employee clocks in and out of work using a fingerprint timekeeping system), a separate claim accrues under BIPA. Businesses should not delay ensuring that they are complying with BIPA and should consider adopting creative litigation and business strategies.
The entire article is great. The authors, Matt Provance, Archis Parasharami, John Nadolenco and Colin Lubelczyk provide an in depth look at the ramifications of this decision and important business considerations moving forward. I encourage you to read the entire piece : here
I’d further encourage you to register for our upcoming BIPA Webinar on March 14th from 1:30 to 3. We have a great panel, you can get CLE or other continuing education requirements and Tech Council members can attend for free. Contact Kirsten McDevitt at kmcdevitt@ilchamber.org. More information: HERE
California Misclassification of Independent Contractors Legislation Brought to Illinois
One of the main, if not THE main, priorities for the Chamber will be ensuring a spectacularly bad idea from California does not take hold here in Illinois. That law is California’s infamous AB 5, which would crush any employer that utilizes 1099 employees. If that’s you, pay special attention here. Also, reach out to me as we want to hear from each potentially impacted industry and company. If you’re unsure, it probably impacts you in some way. California had to exempt dog walkers and baby sitters- its that comprehensive. The following is a detailed breakdown of the proposed language from Aaron Harris of the Illinois Chamber’s Employment Law Council.
The Attorney General’s Office is currently in discussions with several stakeholders on creating a presumption of employment that everyone is an employee unless the employer can show they are an independent contractor. The employer would have to prove all of the factors to establish “Independent contractor” status this would include:
1) An individual has been and will continue to be free from control and direction over services rendered both in contract or agreement of service and in fact:
- Services rendered are outside the usual course of services performed by the individual hired.
- Individual is engaged in an independently established trade, occupation, profession or business.
2) Individual is a sole proprietor, partnership, LLC, Corporation based on additional factors that includes:
- Entity performs services free from the direction or control
- Entity provides services directly to the hiring entity and not the customer
- Entity requires a license, permit, business tax, etc.
- Hiring entity does not represent the servicing entity as an employee to customers
- Entity maintains clientele without restrictions from the hiring entity
- Can negotiate its own rates
- Customarily and regularly exercises discretion and independent judgement in the performance of the services
- Owns the capital goods and gains the profits and bears the losses
- Pays fees, taxes and contributions as required by law.
Employers are deemed to be in violation unless they can show exception to either (1) or (2).
Retaliation: It is a violation against any employer to retaliate against any “employee or independent contractor” exercising the aforementioned rights. This includes:
- Threatening to discharge, suspend, penalize, demote, discriminate against.
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Any adverse action that would impact former employee’s currently or future employment OR
Notice of Reclassified Employees: Every employer must post a sign that can be obtained on IDOL’s website that describes the test to determine whether an individual is an employee or an independent contractor and penalties if the employer fails to classify an employee correctly.
Enforcement of Act: IDOL and Attorney General Office (“AG”) can do investigations, and inspect documents, along with having subpoena power.
- Complaints with IDOL may be filed. IDOL may go into books, question witnesses, quasi administrative proceedings, and civil penalty.
- AG can bring action in circuit court, and conduct investigation, conduct quasi administrative proceedings.
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Private cause of action- individuals can go straight to circuit court and bypass quasi proceedings.
Penalties and Remedies:
- A violation of $2500 for independent contractor misclassification
- $25,000 for Retaliation; 50K for repeat offense of retaliation
- $500 for not posting notice; $1,500 for repeat offenses
Clark note: You all should now by now that I have a special dislike for PRAs. This one is egregious bad. If you do the math above, it works out to be a penalty of approximately $650,000 per employee, per year.
Autonomous Vehicles
I’m representing the IL Chamber as part of a working group concerned about restrictions on autonomous vehicles. This is an exciting area of development and there are a number of bills that would really hurt Illinois’ chances of becoming a leader in an emerging industry. Plus, the thought of removing drunken drivers from the roadways- or even not dropping my kids off at dance class- is the stuff of science fiction.
I want to thank the IMA’s Mark Denzler for putting together meetings with the Senate President and the Speaker. The Senate President meeting was especially helpful as he indicated a desire to “nurture, rather than stifle” innovation. The Speaker too understood the importance of the issue and while he didn’t agree to bottle the bills in Rules (see HB 2053 in committee this week), he too understands the stakes.
Like many issues in Tech, this area cries out for national standards rather than a patchwork 50 state approach.
New Bills of Interest
Last Friday was the House bill filing deadline. The following bills were filed on the final day for introductions.
HB 2902 (Andrade) – Personal Delivery Devices. Provides that a personal delivery device shall be authorized to operate on any sidewalk, crosswalk, or public roadway or highway in the State if the personal delivery device meets specified criteria. Specifies that a personal delivery device shall have all the rights and duties applicable to a pedestrian under the same circumstances. Provides that a personal delivery device shall not be deemed a motor vehicle or a vehicle. Provides that a personal delivery device shall be exempt from all vehicle or motor vehicle registration requirements. Requires a personal delivery device operator to maintain an insurance policy that provides general liability coverage of at least $100,000 for damages arising from the combined operations of any personal delivery devices under the personal delivery device operator's control. Prohibits local authorities from enacting or enforcing a rule, regulation, ordinance, or resolution relating to specified aspects of a personal delivery device.
HB 2913 (Tarver)- Safe Autonomous Vehicles Act. This is the industry bill for autonomous vehicles discussed above. Creates the Safe Autonomous Vehicle Act. Provides that upon notification to the Secretary of State, a Motor Vehicle Manufacturer may commence a safe autonomous vehicle project with a vehicle installed with an Automated Driving System after providing notification to the Secretary of State and after self-certification under certain conditions. The Manufacturer shall determine the geographical boundaries of the project and shall maintain incident records and provide periodic summaries to the Secretary of State and the National Highway Traffic Safety Administration. The Participating Fleet in the program shall be insured by the Manufacturer who shall assume liability for incidents where the automated driving system technology is at fault for that incident. Any person operates a vehicle with automated driving system technology without first satisfying the eligibility requirements in the Act shall be fined $10,000 for a first violation and a second or subsequent violation is a Class A misdemeanor. Preempts home rule powers. Effective immediately.
HB 2951 (Didech) -“Freedom from Drone Surveillance” Police Exception. Amends the Freedom from Drone Surveillance Act. Defines "special event". Deletes "data" from the definition of "information". Provides that "information" does not include data gathered under circumstances in which the drone is used over publicly owned property or private property with prior permission of the owner of the private property when the purpose is training peace officers, public relations, conducting infrastructure inspections, or other similar non-law enforcement purposes. Permits the use of a drone by a law enforcement agency at a special event to prepare for or monitor crowd size, density, and movement; assess public safety staffing; or monitor the safety of the participants. Provides that a law enforcement agency may use a drone to respond to Public Safety Answering Point (PSAP) dispatched calls for service if the primary purpose for the response is to locate or assist victims, or both, identify offenders, or guide emergency response. Provides that information gathered by a drone is subject to the Freedom of Information Act.
HB 2954 (Gong-Gershowitz) – Civil Liability for Doxing. Creates the Civil Liability for Doxing Act. Provides that an individual engages in the act of doxing when that individual intentionally publishes another person's personally identifiable information without the consent of the person whose information is published and: (1) the information is published with the intent that it be used to harm or harass the person whose information is published and with knowledge or reckless disregard that the person whose information is published would be reasonably likely to suffer death, bodily injury, or stalking; and (2) the publishing of the information: (i) causes the person whose information is published to suffer significant economic injury or mental anguish or to fear serious bodily injury or death of the person or a family or household member to the person; or (ii) causes the person whose information is published to suffer a substantial life disruption. Allows a person who is aggrieved by a violation of the Act to bring a civil action against the individual who committed the offense to recover damages and obtain any other appropriate relief. Provides that an individual who is found liable under the Act shall be jointly and severally liable with each other individual, if any, who is found liable under the Act for damages arising from the same violation of the Act. Allows a court to issue a temporary restraining order, emergency order of protection, or preliminary or permanent injunction to restrain and prevent the disclosure or continued disclosure of a person's personally identifiable information or sensitive personal information. Allows a civil action to be brought in any county in which an element of the offense occurred, or in which a person resides who is the subject of the personally identifiable information or sensitive personal information published in violation of the Act.
HB 3098 (Rashid) – App Store Bill Reemerges. Creates the Protect Illinois Technology Jobs Act. Provides that a provider of a digital application distribution platform for which cumulative downloads of software applications from the digital application distribution platform to Illinois users exceed 1,000,000 downloads in the previous or current calendar year may not: (i) require a software application developer that is domiciled in the State to use a particular in-application payment system as a mode of accepting payments from a user for software application downloads or digital purchases; (ii) require use of a particular in-application payment system as a mode of accepting payments from Illinois users to download a software application or purchase a digital or physical product or service through a software application; (iii) retaliate against a developer that is domiciled in the State or an Illinois user for using an in-application payment system or digital application distribution platform that is not owned by, operated by, or affiliated with the provider; or (iv) discriminate against any developer on account of the developer using a third-party payment system to process payments for in-application payments. Exempts special-purpose digital application distribution platforms from the Act. Provides that the Attorney General may receive complaints and investigate violations of the Act. Provides that any person aggrieved by a violation of the Act may commence a civil action. Provides that nothing in the Act shall restrict the ability of a digital application distribution platform to determine the manner in which applications may be downloaded, and specifically, nothing in the Act shall prohibit the ability of a digital application distribution platform to prohibit side-loading of applications.
HB 3194 (Weber) Online Speech. Creates the Freedom from Government and Private Collusion Against Free Speech Act. Provides that if a State agency or employee of the State coordinates with a private company to deny the freedom of speech of a citizen of this State, the citizen shall have a cause of action against that agency or employee and private company. Sets forth limitations. Provides that if a citizen of this State prevails in an action under the Act, the State agency or employee and the private company shall reimburse the Office of the Attorney General in the amount of 3 times the legal fees incurred in the action, plus the amount of damages awarded as the court shall determine. Effective immediately.
HB 3199 (Keicher) – BIPA Reform. Amends the Biometric Information Privacy Act. Changes the term "written release" to "written consent". Allows written consent to be obtained by electronic means. Provides that a person aggrieved by a violation of the act may only commence an action after the aggrieved person provides a private entity 15 days' written notice identifying the specific provisions of the Act the aggrieved person alleges have been or are being violated. Provides that if, within the 15 days, the private entity actually cures the noticed violation and provides the aggrieved person an express written statement that the violation has been cured and that no further violations shall occur, no action for individual statutory damages or class-wide statutory damages may be initiated against the private entity. Provides that if a private entity continues to violate the Act in breach of the express written statement provided to the aggrieved person, the aggrieved person may initiate an action against the private entity to enforce the written statement and may pursue statutory damages for each breach of the express written statement and any other violation that postdates the written statement. Removes language providing that a prevailing party may recover for each violation of the Act. Requires the Department of Labor to include reference to any employer requirements under the Act in materials that the Department is required by law to provide employers in the State.
HB 3204 (McCombie) – BIPA 1 year statute of limitations.
HB 3285 (Kifowit) – AI Consent Act. Creates the Artificial Intelligence Consent Act. Provides that if a person creates an image or video that uses artificial intelligence to mimic or replicate another person's voice or likeness in a manner that would otherwise deceive an average viewer, and displays the content for public viewing, the creator must provide a disclosure on the bottom of the image or video that the image or video is not authentic and does not reflect the original voice or likeness of the person being depicted, unless the person whose voice or likeness is being depicted consents to its use. A person aggrieved by a violation of the Act shall have a right of action against an offending party.
HB 3301 (Costa Howard) Independent Contractors. Amends the Unemployment Insurance Act. In provisions concerning the directory of new hires, provides that the definition of "newly hired employee" includes an individual under an independent contractor arrangement. Effective January 1, 2024.
HB 3305 (Davidsmeyer) – Domain Name Grace Period. Provides that a person who hosts or registers an Internet domain name to a person located in this State shall not sell or lease the Internet domain name to another person for a period of 5 years after the buyer or lessee ends his or her ownership or lease of the Internet domain name. Provides that a buyer or lessee who ends his or her ownership or lease agreement shall have the right to repurchase or renew the lease for the Internet domain name during the 5-year period for the cost the buyer or lessee would have owed to the host or registrar if the ownership or lease agreement had not ended. Provides that any person who violates these provisions commits an unlawful practice within the meaning of the Act.
HB 3385 (Rashid) – Data Privacy. Creates the Illinois Data Privacy and Protection Act. Provides that a covered entity (any entity or any person, other than an individual acting in a non-commercial context, that alone or jointly with others determines the purposes and means of collecting, processing, or transferring covered data) may not collect, process, or transfer covered data unless the collection, processing, or transfer is limited to what is reasonably necessary and proportionate. Provides that a covered entity and a service provider shall establish, implement, and maintain reasonable policies, practices, and procedures concerning the collection, processing, and transferring of covered data. Contains provisions concerning retaliation; transparency; individual data rights; consent; data protection for children and minors; civil rights; data security; small business protections; executive responsibility; service providers and third parties; enforcement; severability; and rulemaking. Effective 180 days after becoming law.
HB 3438 (Sosnowski) – Connected Devices. Creates the Keep Internet Devices Safe Act. Provides that no private entity may turn on or enable a digital device's microphone unless the registered account holder or another user that is setting up or configuring the device first agrees to a consumer agreement or privacy notice meeting specified criteria. Provides that a private entity that collects, stores, or transmits any information collected through a digital device's microphone concerning a registered account holder shall implement and maintain reasonable security measures to protect such information from unauthorized access, acquisition, destruction, use, modification, and disclosure. Provides that the Attorney General shall have exclusive authority to enforce the Act. Provides that any waiver of the provisions of the Act is void and unenforceable
HB 3478 (Hanson) – Automatic Contract Renewal. Amends the Automatic Contract Renewal Act. Provides for additional violations, notification, and cancellation requirements for a person, firm, partnership, association, or corporation that makes an automatic renewal offer or continuous service offer to a consumer. Provides that a person, firm, partnership, association, or corporation that makes an automatic renewal offer or continuous service offer shall provide a toll-free telephone number, email address, a postal address if the seller directly bills the consumer, or it shall provide another cost-effective, timely, and easy-to-use mechanism for cancellation.
HB 3563 (Rashid) AI Task Force. Amends the Department of Innovation and Technology Act. Provides that the Department of Innovation and Technology shall establish the Generative AI and Natural Language Processing Task Force investigate and provide a report on generative artificial intelligence software and natural language processing software. Sets forth the members to serve on the Task Force. Provides that the Task Force shall hold at least 5 meetings, and specifies the format and the location of those minimum amount of meetings. Provides for additional responsibilities of the Task Force. Provides that the Department of Innovation and Technology shall provide administrative and technical support to the Task Force. Provides that the Task Force shall provide a report to the Governor and the General Assembly covering the Task Force's investigation into generative artificial intelligence software and natural language processing software and the Task Force's additional responsibilities.
HB 3564 (Rashid) – Cell Tower Property Tax. Provides that wireless telecommunication towers that are not otherwise exempt under a specific provision of the Code are subject to local property taxes and shall be valued according to policies adopted by the chief county assessment officer. Effective immediately.
HB 3593 (Mussman) – Right to Repair. Creates the Digital Electronic Equipment Right to Repair Act. Provides that, for digital electronic equipment and parts for digital electronic equipment sold or used in the State, an original equipment manufacturer shall make available to an independent repair provider, solely for the purpose of repairing digital electronic equipment, on fair and reasonable terms, any documentation, parts, service access methods, and tools, including, but not limited to, any updates to information, firmware, or embedded software that is needed for purposes of repair of digital electronic equipment and training courses and materials on the operation, inspection, diagnosis, maintenance, and repair of digital electronic equipment. Provides that a violation of any of the provisions of the Act is an unlawful practice under the Consumer Fraud and Deceptive Business Practices Act. Provides for penalties. Provides that nothing in the Act shall require an original equipment manufacturer to divulge a trade secret to an independent repair provider. Effective January 1, 2024.
HB 3601 (Mussman) – Education Right to Repair. Creates the Educational Technology Right to Repair Act. Provides that, for educational technology equipment and parts for educational technology equipment sold or used in the State, an original equipment manufacturer shall make available to an independent repair provider, solely for the purpose of repairing educational technology equipment, on fair and reasonable terms, any documentation, parts, service access methods, and tools, including, but not limited to, any updates to information, firmware, or embedded software that is needed for purposes of repair of educational technology equipment and training courses and materials on the operation, inspection, diagnosis, maintenance, and repair of educational technology equipment. Provides that a violation of any of the provisions of the Act is an unlawful practice under the Consumer Fraud and Deceptive Business Practices Act. Provides for penalties. Provides that nothing in the Act shall require an original equipment manufacturer to divulge a trade secret to an independent repair provider.
HB 3689 (Mussman) – Broadband. Amends the Illinois Broadband Adoption Fund Act. Changes the definition of "provider" to include a provider of communication services. Provides that each telecommunications carrier, wireless carrier, cable and video service provider, and Interconnected VoIP service provider shall notify its customers that if the customer wishes to participate in the funding of the Illinois Broadband Adoption Fund, the customer may do so by electing to contribute on a monthly basis a fixed amount that will be included in the customer's monthly bill. Provides that the fixed amount choices shall include, but not be limited to, $1, $2, or $5 per month. Provides that if the customer has elected electronic billing, the customer shall also be notified monthly of the opportunity to contribute to the fund. Provides that the customer may cease contributing at any time upon providing notice to the carrier. Provides that the notice shall state that any contribution made will not reduce the customer's bill for communications or broadband services. Provides that the customer's failure to remit the amount of increased payment will reduce the contribution accordingly. Provides that every telecommunications carrier, wireless carrier, cable and video provider, and Interconnected VoIP service provider shall remit the amounts contributed in accordance with the terms established by the fund. Makes other changes to this Act and the Public Utilities Act.
HB 3773 (Andrade) – Predictive AI. Provides that an employer that uses predictive data analytics in its employment decisions may not consider the applicant's race or zip code when used as a proxy for race to reject an applicant in the context of recruiting, hiring, promotion, renewal of employment, selection for training or apprenticeship, discharge, discipline, tenure or terms, privileges, or conditions of employment. Provides that nothing in the Act shall be construed to prevent the use of predictive data analytics to support the inclusion of diverse candidates in making employment decisions. Amends the Consumer Fraud and Deceptive Business Practices Act. Provides that a person or entity that relies either partially or fully on predictive data analytics to determine a consumer's creditworthiness may not allow the use of information about the consumer that assigns specific risk factors to the consumer's race or zip code resulting in rejection of credit or other adverse credit-related action to a consumer. Provides that a person or entity that uses predictive data analytics to determine the creditworthiness of more than 50 consumers in a calendar year who are State residents shall devise procedures to ensure that it does not consider information that assigns specific risk factors to a consumer's race or zip code when rejecting or taking other adverse action on a consumer's application for credit. Provides that a person or entity that violates the provisions commits an unlawful practice within the meaning of the Act.
HB 3880 (Moeller) – Children Data Privacy. Creates the Children's Privacy Protection and Parental Empowerment Act. Provides that a business that provides an online service, product, or feature likely to be accessed by children shall take specified actions, including completing a Data Protection Impact Assessment for any online service, product, or feature likely to be accessed by children. Provides that a business shall complete a Data Protection Impact Assessment on or before July 1, 2024, for any online service, product, or feature likely to be accessed by children offered to the public before July 1, 2024. Provides that any business that violates the Act shall be subject to an injunction and liable for a civil penalty of not more than $2,500 per affected child for each negligent violation or not more than $7,500 per affected child for each intentional violation. Creates the Children's Data Protection Working Group to deliver a report to the General Assembly regarding best practices for the implementation of the Act. Effective immediately.
HB 3943 (Douglass) – Social Media Content Moderation. Creates the Social Media Content Moderation Act. Provides that a social media company shall post terms of service for each social media platform owned or operated by the company in a manner reasonably designed to inform all users of the social media platform of the existence and contents of the terms of service. Provides that on a semiannual basis, a social media company shall submit to the Attorney General a terms of service report including specified information. Provides that a social media company that violates the provisions of the Act shall be liable for a civil penalty not to exceed $15,000 per violation per day. Effective immediately.
Articles of Interest
Chips Act Will Test Whether US Can Reverse Semiconductor Exodus
Group says Illinois’ biometric privacy laws could cripple businesses
CPS to spend $76 million on school security cameras, but experts see downsides to more surveillance
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