A federal district court ruled that a commercial general liability policy’s employment-related practices exclusion is not applicable to a lawsuit filed against a grocer under the Illinois Biometric Information Privacy Act and that an insurer is therefore obligated to cover defense costs.

Charlene Figueroa, a former employee of Itasca, Illinois-based Tony’s Finer Foods Enterprises Inc., a 16-store grocery chain, sued the company in state court in 2018, charging that it used employee fingerprints to clock in and out of work, in violation of BIPA, according to Tuesday’s ruling by the U.S. District Court in Chicago in State Automobile Mutual Insurance Co. v. Tony’s Finer Foods Enterprises Inc.

Columbus, Ohio-based State Automobile filed suit in federal court seeking a declaration it had no obligation to defend Tony’s in the litigation because of an employment-related practices exclusion in its policy, and because it had received the claims notice 20 months after Tony’s had been served with the lawsuit.

The ruling said the employment-related practices exclusion includes a “laundry list” of targeted actions against an employee and that it applies to practices “such as coercion, demotion, evaluation, reassignment, discipline, defamation, harassment, humiliation, or discrimination directed at that person.”

“Using one’s finger to clock in and clock out is an awkward fit in that string, at best,” the ruling said, noting that scanning one’s finger is not a disciplinary action.

“It does not affect an employee’s standing with the company. And it is not mistreatment of a specific employee, either, unlike defamation, harassment and so on.”

The ruling also held that the issue of whether the notice came too late should be decided by a jury.

Tony’s attorney Eamon Kelly, a partner with Sperling & Slater P.C. in Chicago, said in a statement, “We are thankful the Court provided a compelling opinion on important coverage issues.”

A State Automobile attorney had no comment.

Last month, another federal district court judge in Chicago refused to dismiss putative class action litigation filed against a company charged with downloading more than 3 billion facial images from the internet in alleged violation of the Illinois Biometric Information Privacy Act.