As businesses reopen, customers and clients are being asked to wear masks, keep their distance and, in some cases, sign away their right to sue if a trip to the dentist or hair salon results in a coronavirus infection.
Since April, there has been speculation about whether the next round of coronavirus relief will include liability protections for businesses, but Congress is still weeks away from passing another stimulus package. In the meantime, companies are taking it upon themselves to protect against personal injury lawsuits by making patrons and customers sign liability waivers.
It’s not just small businesses jumping on the bandwagon.
The NFL is reportedly considering asking fans to sign a waiver to attend games this season, and the Trump campaign has asked supporters to agree to assume all risk related to COVID-19 exposure when signing up to attend rallies. But are these agreements always a good idea, and will they hold up in court?
Although liability waivers and other exculpatory agreements may add some protections, they aren’t a substitute for following COVID-19 health and safety guidance from public health authorities.
“My advice to in-house counsel in considering implementing a liability waiver as part of their other protocols to protect against these sorts of lawsuits would be to see it as just another level of protection, but certainly not a silver bullet,” said Moye White partner Luke Ritchie.
Liability waivers add to an existing “arsenal of protections,” he said, including signs telling customers to wear masks, warnings about COVID-19, temperature checks and other safety and sanitation protocols.
One drawback of requiring waivers is the possibility of scaring off potential patrons who don’t want to be reminded of the risk of coronavirus while out on the town.
Customers might assume a business that requires a waiver poses a higher risk of infection than one that doesn’t.
But while companies will have to weigh the effect a liability waiver could have on sales, from a legal standpoint, it probably can’t hurt to have one. “Purely from the litigator’s perspective… it’s better to have that additional protection in place,” Ritchie said.
Holland & Hart partner Lee Gray agreed there aren’t any real legal downsides to requiring liability waivers. “There’s a possibility that it won’t do any good,” Gray said. “But it wouldn’t harm you. Just by virtue of having it, you’re not going to be found more likely to have been negligent because you ask people to waive liability.”
Liability waivers are already common in Colorado’s recreational industries, from skiing and whitewater rafting to skydiving, and courts in the state have long upheld such waivers for non-essential businesses.
In terms of enforceability, Ritchie said, the courts look at the existence of a duty to the public, the nature of the service being performed, whether the contract was fairly entered into and whether the intention of the parties is expressed in clear and unambiguous language.
“I think with respect to COVID-19, the third and fourth factors are probably going to be the more critical ones,” he added.
The question of whether a contract was fairly entered into depends on whether the customer was free to walk away from the activity. “So that’s basically looking at bargaining power,” Gray said.
For example, an employer who asks an employee to sign a waiver upon returning to work will have difficulty enforcing the agreement since the employer has power over the worker, who can’t easily refuse a paycheck.
The same is true for providers of essential services, such as public utilities, transportation and medical care, where patrons might not have the choice to refuse service the same way they would at a non-essential business like a bowling alley or nail salon.
“With respect to COVID-19, generally we should see courts enforcing waivers for businesses that are offering non-essential services,” Ritchie said. He added that the industries deemed essential by the governor’s executive orders “would probably fall in line well with the way that the courts would look at it.”
“To me, the most important thing — and the thing that I can affect for my clients — would be whether the intention of the parties is expressed in clear and unambiguous language,” Gray said. He added companies should skip the fine print and legalese and use plain language.
Although Colorado businesses might be tempted to look to the local recreation industry for templates, Gray recommended companies tailor their language to address and notify customers of the specific risks of COVID-19.
“Because this is a very unique situation, you shouldn’t just go online and try to create from an existing waiver that a ski company has,” he said. “Those are different situations.” He advised companies to be clear about what they’re doing to mitigate the risks of COVID-19 while also acknowledging there is an inherent risk to visiting any place of business during a pandemic.
Many in the business community are waiting to see what kinds of protections against coronavirus-related lawsuits Congress might serve up later this summer.
Senate Majority Leader Mitch McConnell has insisted that the next coronavirus stimulus package include sweeping liability protections for businesses. Last week, the Republican senator outlined his priorities for a second relief package, including a five-year liability shield “for everyone,” including businesses, health care providers, schools and local government.
If such a measure passes, it could make individual businesses’ waivers redundant, but the extra protection still can’t hurt. “Generally, the more the better,” Ritchie said, adding that even a liability shield from Congress would have its limits.
“All of that is subject to some level of reasonableness. Even legislation isn’t going to sign away liability for gross negligence or intentional acts.”