How effective are liability waivers in the age of the novel coronavirus?
In Austin, Texas, Sarah Statham closed her Method Hair salon for three months, cancelling more than 9,000 appointments after Texas locked down businesses to prevent the spread of COVID-19.
Three weeks ago, Statham resumed business at 25% of the salon’s capacity as the Texas economy began to reopen. Now all customers must sign a COVID-19 waiver acknowledging the risk the deadly virus presents and releasing the salon from any liability.
Method Hair follows the Centers for Disease Control and Prevention guidelines. The staff remains six feet apart, and everyone wears masks. Stylists wash their hands frequently, use sanitizer, sterilize equipment and follow additional safety standards.
So far, no one has refused to sign the waiver, Statham says. And no one has gotten sick. Two of her stylists were tested but came back negative for the virus.
“We’ve gotten a great response from our clients,” she says. “They say I can see you guys are taking this very, very seriously.”
Doing business during a pandemic can be risky because the stakes are high. The coronavirus has taken 127,417 lives in the U.S. and infected 2.6 million people as of July 1, according to Johns Hopkins University, which has been tracking the virus.
As businesses reopen, the practice of asking customers to sign COVID-19 liability waivers is increasing throughout the United States, but it is uncertain how much weight those waivers will carry in court. And if the businesses aren’t complying with local, state and federal health and safety guidelines concerning COVID-19, they may still be found liable.
Dentist and doctor’s offices, salons, restaurants, gyms, day care centers, movie theaters and bowling alleys are just some of the businesses now asking people to sign COVID-19 waivers.
“No one really knows how this is going to shake out,” says Tyler T. Rasmussen, a litigation partner with Fisher Phillips in Irvine, California. “This is unchartered territory.”
Waiver legal opportunities and limitations
The COVID-19 waivers do not provide complete blanket immunity to businesses from lawsuits, Rasmussen says. The waivers may limit or prevent certain liability—like common negligence suits—and highlight safety risks to customers, but they don’t apply to intentional or wanton conduct or gross negligence claims.
Protections are limited to specific language in the waiver and the documents must be carefully drafted, he adds.
Like any contract, there are different ways for a business to obtain a COVID-19 waiver. Some are hiring lawyers to craft them. Others use free or inexpensive templates downloaded from the Internet.
“To be the most enforceable, you have to have a contract that is narrowly tailored to your business,” Rasmussen says. “It has to be clear and unambiguous and easily understandable by the individual who is reading it.”
Additionally, many states require waivers to be signed by individuals, says Melissa J. Tea, litigation attorney at K&L Gates in Pittsburgh. The business can’t just put a sign on the door or the wall. “It’s got to be an actual contract signed between the business and the customer.”
Event waivers similarly provide an agreement between attendees and organizers; the waiver only applies to the person attending the event, Tea says.
Organizers for President Donald Trump’s reelection campaign had attendees sign waivers at events held in Tulsa, Oklahoma, and Phoenix, Arizona, acknowledging “inherent risk of exposure to COVID-19 exists in any public place where people are present.” The waiver also discharged organizers “from any and all liability under any theory, whether in negligence or otherwise, for any illness or injury.”
If the person who signed the waiver at the Trump rally, then goes home and gets grandma sick and grandma passes away, her estate could potentially take action against the rally organizers, says Andrew S. Pollis, professor of law at Case Western Reserve University in Cleveland.
Often liability waivers discourage people from taking legal action, Pollis says. However, if the Trump campaign was negligent in holding a rally, it could be sued.
However, Pollis points out, the difficulty with event waivers—and all of these waivers—is contact tracing and proving fault.
“Because this is the first pandemic of this magnitude that we have faced in a century, our traditional tort law is not yet equipped to answer many of the questions that are to likely arise,” Pollis says. “It’s not just the pandemic, in part, it is because we have never had the government respond so poorly and inconsistently to a major health crisis. Standards are set when you are measuring them against the government directives.”
For example, a business being sued for light safety precautions can point to Trump’s lax mask messaging, he says. And whether or not a business can counter sue is dependent on the language of the waiver and the jurisdiction in which it occurred.
Broader legal protections vs. a waiver system
A new federal law is being proposed to create a safe harbor for businesses and nonprofit organizations, including colleges and universities, that follow federal or state guidelines for COVID-19 to protect them against lawsuits, says John K. Abegg, executive vice president of the U.S. Chamber Institute for Legal Reform, based in Washington, D.C.
The legislation may be included in the next coronavirus economic relief bill, which Senate Majority Leader Mitch McConnell has said would be completed by the end of the summer, Abegg says.
The Institute is recommending the law be retroactive to December 2019 and terminate on Oct. 1, 2024, when the federal emergency declaration expires, according to the Families First Coronavirus Response Act, which was signed into law March 18.
There has been an uptick in COVID-19 related lawsuits as the economy reopens, Abegg says. And the increased use of COVID-19 waivers by businesses is clear evidence that companies and organizations are worried about lawsuits, he adds.
“Waivers are not a fullproof measure against lawsuits,” he says. “This is why we need legislation.”
But some legal experts say legislation isn’t the answer. For example, Ted Bassett, partner of the personal injury litigation group at Mirick O’Connell Attorneys at Law in Worcester, Massachusetts, sees the legislation as a backdoor to tort reform.
“The only ones who benefit from such immunity laws are the insurance companies,” Bassett says, citing nursing homes, which in some instances can find immunity from financially crippling lawsuits.
States are concerned about spikes of COVID-19 lawsuits and they should be, but we shouldn’t be granting businesses immunity, says Remington A. Gregg, counsel for civil justice and consumer rights at Public Citizen, a consumer advocacy group based in Washington, D.C.
“Immunizing businesses will not inspire confidence in people to go back, in fact, it will hurt the economy,” Gregg adds.
States that are granting liability law waivers for businesses affected by COVID-19 are taking the right approach, Gregg says. State tort law is the province of states. There is no federal tort law.
Thirteen states, including Alaska, Iowa, Kansas, Kentucky, Louisiana, Massachusetts, New Jersey, New York, North Carolina, Oklahoma, Utah, Wisconsin and Wyoming, as well as the District of Columbia, have passed COVID-19 laws to limit the liability of health care providers and businesses, according to research by the American Tort Reform Association. The laws vary by state: Some just cover health care providers; others cover all businesses.
Also, the governors of 23 states have issued executive orders limiting the liability of health care providers and some businesses related to COVID-19, according to ATRA research.
The court system is here as a stopgap to hold people accountable, Gregg says.
“It is completely wrong and possibly unconstitutional for Congress to grant businesses immunity by papering over the laws of all 50 states,” he says. “If you remove that safeguard, there’s no incentive for businesses to do the right thing and take reasonable precaution and go the extra step to ensure that their business is safe.”
To sign or not to sign
In four states—Virginia, Louisiana, Montana and Connecticut—waivers are not even enforceable contracts, says Bassett.
If someone goes into a restaurant, beauty salon or tennis club, and they are asked to sign a liability waiver, they would be giving up their right to bring a lawsuit based on negligence in most cases, he says. However, if you were able to prove the establishment didn’t do anything to protect customers like following the CDC guidelines, in Massachusetts, that is gross negligence.
“Whenever you are dealing with a situation of high risk, even a momentary inattention to detail or safety can constitute gross negligence,” he adds.
Some businesses are additionally asking employees to sign COVID-19 liability waivers, but those are worthless, Bassett says. Employees are covered by worker’s compensation laws in every state, and employers cannot make employees sign a document that would be totally unenforceable, he adds.
But the Occupational Safety and Health Administration, the federal agency that requires employers to provide safe and healthy work environments for employees, has identified COVID-19 contracted in the workplace as a reportable injury, says April Boyer, partner at K&L Gates in Miami. COVID-19 lawsuits based on unsafe work environments have been filed, she says.
For example, on April 23, plaintiffs Jane Doe and the Rural Community Workers Alliance filed a lawsuit against Smithfield Foods alleging that it failed to adequately protect workers at its meat processing plant in Milan, Missouri, from the virus that causes COVID-19. The lawsuit alleged the plant did not enforce social distancing, face coverings, handwashing breaks and paid leave for sick workers.
On May 5, a judge with the U.S. District Court for the Western District of Missouri dismissed the complaint. The judge ruled the matter was best left with OSHA to handle.
In the U.S., 3,144 COVID-19-related complaints have been filed nationwide from Jan. 30 to June 30, according to data collected by the law firm Hunton Andrews Kurth. The majority of the cases are for insurance disputes, prisoner and detainee petitions and civil rights. Only 58 of the cases are related to conditions of employment, including lack of personal protective equipment, exposure to COVID-19 at work, wrongful death and personal injury. Another 120 cases are for wrongful termination.
There hasn’t been a lot of litigation in this area right now, Rasmussen says. In California, there have only been 40 COVID-related cases on the employment side, he says.
The waiver issue is just popping up, so it hasn’t made its way to the court system yet, says Gregg at Public Citizen.
Gregg says he would not sign a waiver and doesn’t think others should either. If a business or nonprofit organization is complying with local, state and federal CDC guidelines and taking all necessary steps to protect people, then a waiver isn’t needed.
Frederick Ferrand, partner at Swift Currie in Atlanta, doesn’t have a problem with signing COVID-19 waivers. He says the forms don’t surprise him and he understands the risks.
“COVID right now is like a giant game of Russian roulette; you take a chance every time you walk into a supermarket,” Ferrand says. “You take steps to protect yourself, but you never know what’s going to happen.”
Updated on July 17 to fix a misspelling of Swift Currie.