Biometric Company Cannot Compel Arbitration Of Claims That It Unlawfully Retained Individuals’ Data

Fredy Sosa v. Onfido, Inc. provided an Illinois District Court with the obligation to opine whether a company engaged by an online marketplace to verify users’ identities could compel arbitration of claims brought by marketplace customers that their biometric data was being unlawfully stored. The court’s answer was “no.”

In this putative class action, users of the online marketplace Offerup, Inc. agreed by way of the marketplace’s terms and conditions to arbitrate disputes with the marketplace. Users provided photographs to enable verification of their identities. The marketplace outsourced the verification to defendant Onfido, Inc. which allegedly retained and/or used the information in violation of the Illinois Biometric Information Privacy Act.

In response to the users’ claims of statutory violation, Onfido sought to compel arbitration by leveraging Offerup’s terms and conditions to which the users agreed. The court rejected this attempt, finding that Onfido failed to satisfy any of the recognized theories whereby a non-party to the arbitration agreement could invoke its terms.