Labor & Employment Law Daily Wrap Up, PROCEDURE—N.D. Ill.: Employee’s GIPA claim survives, for now, ERISA preemption challenge, (Jan 3, 2025)

By Kathleen Kapusta, J.D.

The employee alleged that she was asked, during a physical examination at work, about her family history of diseases, including heart disease, cancer, and diabetes.

Although Sabert Corporation failed to convince a federal court in Illinois that, at this stage, an employee’s proposed class action suit under the Illinois Genetic Information Privacy Act (GIPA) was preempted by ERISA, as it was not obvious from the complaint that an ERISA plan was involved, the court permitted the parties to conduct limited discovery on whether an ERISA plan was the basis of the employer’s alleged collection of genetic information and what role the company had in collecting the information. The court, however, limited the discovery to the employee’s individual claims for now (Harris-Morrison v. Sabert Corp., No. 1:23-CV-16120 (N.D. Ill. Dec. 31, 2024)).

Medical exam. About six years after she was hired by the food packaging products manufacturer, the employee alleged that she was required to undergo a physical examination at work, during which a third-party medical provider presented her with a written questionnaire asking whether she had a family history of various diseases and disorders. Afterward, the provider verbally asked about her and her family’s medical conditions and history—including cardiac health, cancer, and diabetes—and noted her answers in a paper file.

Because these medical conditions, the employee argued, have genetic predispositions, she revealed her genetic information by disclosing them. Further, she asserted, the disclosure of genetic information was a condition of employment because Sabert required her to attend the examination. Moreover, the company now purportedly asks employees and prospective employees during the hiring process and annually thereafter to provide family medical histories as a condition of employment.

Lawsuit. The employee subsequently sued in state court, bringing claims under GIPA on behalf of herself and similarly situated employees and prospective employees. She estimated that all or most of the 1,000 individuals employed by Sabert in Illinois fell within her proposed class. Sabert, she alleged, violated the class members’ privacy rights to genetic information as protected by GIPA, which prohibits soliciting, requesting, or requiring genetic information of a person or a family member of a person as a condition of employment or pre-employment application. She also asserted that she never provided Sabert with any written authorization “for the use of her genetic information in furtherance of a workplace wellness program.”

Removal. In an attempt to remove the case to federal court, Sabert argued that the employee alleged she provided her family medical history “in furtherance of a workplace wellness program” and any such program was controlled by its employee benefit plans. Thus, her state-law claim was preempted by ERISA and should be dismissed. The company based its removal on federal-question jurisdiction and while the employee disputed preemption and federal-question jurisdiction, she conceded that the court had diversity jurisdiction under the Class Action Fairness Act (CAFA).

Jurisdiction. Agreeing with the employee that it had diversity jurisdiction under CAFA, the court pointed out that her estimated class size of 1,000 exceeded CAFA’s 100-member threshold; the employee was a citizen of Illinois and Sabert was incorporated in and had its headquarters in New Jersey; and the employee, who was seeking damages of at least $15,000 for each alleged GIPA violation, could possibly recover $15 million dollars. Thus, said the court, CAFA’s diversity-jurisdiction requirement was satisfied.

As to Sabert’s theory of federal-question jurisdiction based on ERISA preemption, the court noted that there are two types of preemption. Conflict preemption is a defense to a state-law claim and cannot serve as a basis for federal-question jurisdiction while complete preemption can give rise to federal question jurisdiction because it means that the state-law claim is in reality completely based on federal law.

Complete preemption. In determining whether a state-law claim is completely preempted by ERISA, the initial inquiry, the court explained, is whether there is an ERISA employee benefits plan in which the plaintiff is a participant. In addition, the court pointed out, ERISA completely preempts a plaintiff’s claim only if they could have brought it under Section 502(a)(1)(B), ERISA’s civil enforcement mechanism.

Rejecting Sabert’s complete preemption argument here, the court noted that the alleged GIPA violation largely involved a physical examination, there was no mention in the complaint of an employee benefit plan, and it was not obvious that the physical exam necessarily related to an employee benefit plan. Though Sabert argued that the complaint referred to a “workplace wellness program,” the language to which it pointed merely stated that the employee did not provide authorization to Sabert “for the use of her genetic information in furtherance of a workplace wellness program.”

“This negative statement does not support a positive inference that a ‘workplace wellness program’ is involved,” said the court, and that “inference is especially untenable—absent uncovering facts in discovery—when the statement appears to track the statutory language of GIPA to negate an exception to the prohibition on collecting genetic information.”

Though the court pointed out that a plaintiff cannot avoid complete preemption simply by disguising federal claims through artful pleading and strategic omission, here the complaint was so devoid of any mention of an employee benefit plan that there was no basis on which to infer complete preemption.

Section 502(a)(1)(B). The court also noted that even if discovery were to reveal the involvement of an ERISA plan, complete preemption was still unlikely, as the employee likely could not have brought her claim under ERISA Section 502(a)(1)(B) because she was not suing for any benefits or rights under the plan but instead was seeking damages for violation of her privacy rights under GIPA. Though an ERISA plan’s terms might touch on the collection of genetic information, the court doubted it would confer any privacy rights and thus any preemption would more likely take the form of conflict preemption.

Conflict preemption. And here, said the court, any conflict preemption argument would fail at this stage for the same reason as complete preemption—it was not obvious from the complaint that an ERISA plan was involved. For its part, Saber pointed to the Genetic Information Nondiscrimination Act (GINA), which offers protections for genetic information similar to those in GIPA, arguing that it amends ERISA and thus strengthens its contention that GIPA is preempted.

Though Saber relied on a Congressional Research Service report to argue that Title I of GINA amends ERISA, “it is Title II of GINA that addresses genetic discrimination in the employment context, which at least bears some similarity to the GIPA provision invoked” by the employee, said the court, noting that Title II makes clear that it does not preempt state laws that provide equal or greater protections. “Because of that anti-preemption provision, Title II does not share ERISA’s broad preemptive force, whether or not it is incorporated by ERISA,” the court explained, denying without prejudice the company’s motion to dismiss based on preemption.

Limited discovery. Because discovery could reveal facts supporting ERISA preemption, the court permitted limited discovery on whether an ERISA plan was indeed the basis for the collection of genetic material. Noting that discovery would also reveal either the strength or weakness of the employee’s claim that the family medical history requested by the third-party medical provider was required by Sabert to avoid workplace injuries or death, the court also permitted discovery on Sabert’s role in the alleged collection of genetic information.

It limited discovery, however, to the employee’s individual claims, noting that class action-related discovery or class-certification discovery was premature at this point.

The case is No. 1:23-CV-16120.

Judge: Chang, E.

Attorneys: Edward A. Wallace (Wallace Miller) for Tamiko Harris-Morrison. Christopher G. Ward (Foley & Lardner) for Sabert Corp.

Companies: Sabert Corp.

Cases: Procedure StateLawClaims Discrimination ClassActions IllinoisNews GCNNews