The Effectiveness (or not) of Liability Waivers for Businesses Reopening in the COVID-19 Era

May 11, 2020Article

As more businesses are allowed to reopen and state governments begin easing COVID-19 restrictions, liability waivers or assumption of the risk agreements become an important consideration for businesses with public-facing employees. This is especially true for those with employees who must interact closely with customers.

Many businesses, including indoor children’s playcenters, spas, and gyms, have had a longstanding practice of requiring customers to execute liability waivers prior to entering their premises and partaking in activities and/or receiving services. Others, like barber shops, restaurants, and bowling alleys are now evaluating the necessity of liability waivers in this COVID-19 era. (Insurers may also consider whether to expand the categories of businesses for which they require liability waivers as a prerequisite to issuing policies.) Whether updating an existing liability waiver or determining whether a to begin using one, it is imperative that one be familiar with applicable law in the state or states where the business operates.

The first step in evaluating the need for a waiver is to recognize the potential liability that the business may be facing. Even in states without an explicitly recognized cause of action for negligent transmission of an infectious disease,[1] businesses can face claims and lawsuits under general negligence principles for failing to take reasonable steps to protect customers and others coming upon their premises from known hazards [2] including contraction of COVID-19 and other infectious diseases. Understanding the nature of the potential claims related to alleged transmission of COVID-19 to customers is critical in determining what precautions to implement in order to avoid such claims altogether or to successfully fight them once they are brought.

Requiring individuals patronizing a business to sign liability waivers can be part of an effective strategy to minimize the risk of a successful claim arising out of the alleged transmission of COVID-19. Due to the numerous limitations and exceptions to the enforceability of such waivers, however, businesses should not rely on liability waivers alone or even primarily. They should be considered as part of a robust and comprehensive risk management strategy that includes following all government-issued guidance for safe operations.

Undoubtedly, liability waivers can in some cases limit a business’s exposure to claims from customers injured while utilizing its services.[3] In fact, liability waivers have been used to reduce liability for communicable diseases for decades.[4] This is because in many states a liability waiver or release is enforceable as a contract between the parties.[5]  Some states, however, refuse to enforce liability waivers altogether.[6] Other states have specific legal exclusions that bar the assumption or waiver of gross negligence[7] or intentional acts.[8] Thus, while a customer may have assumed the risk of being negligently[9] infected during a routine haircut or coloring, a stylist who performs in a grossly negligent manner will put the shop at risk of being sued and the waiver not being a defense to the lawsuit.

Additionally, some courts have recognized a cause of action for “indirect infection” of a communicable disease whereby someone who contracts a disease from a family member can bring a cause of action against the person outside the home who was the initial source of the infection.[10] In other words, the universe of potential negligent transmission claimants for businesses reopening in the post COVID-19 world is not limited to actual customers, but also may include family members of customers who contract the virus at the business and bring it home. Generally, a liability waiver executed by the customer at the point of service does not bar a lawsuit by a subsequently infected family member.[11]

It should be noted that a sick customer would still be required to show the source of the infection was the shop and its employees in order to make a successful claim. In addition to the signed waiver, support for that defense will be bolstered by carefully following and memorializing the use of the CDC, state, and other governmental guidelines as to the operation of the business and cleaning protocols. This evidence would tend to show that exposure occurred at a place other than the target business.

Conversely, not following published guidelines will make a claim much easier for the plaintiff to prove. For example, on May 5, 2020 Texas Governor Greg Abbott signed an Executive Order which allowed barbershops to reopen on May 8, so long as the barbershops followed Minimum Standard Health Protocols.[12] These standard health protocols include requirements for masks, social distancing, and hand washing.[13] A liability waiver, regardless of how well drafted, would do little to protect a barbershop that re-opened, but failed to follow the government-issued guidelines resulting in illness to a customer.[14] Thus, although liability waivers can be part of a COVID-19 risk mitigation strategy, much more critical is for businesses to follow safe workplace guidelines and requirements and to have in place well-considered risk management plans, a part of which may be waivers.

Authors: Peter A. Jacxsens, Jr. (Partner, Atlanta), Phil J. Montoya, Jr. (Partner, Los Angeles)

Hawkins Parnell & Young's national litigation team is helping businesses across the United States navigate unprecedented legal challenges arising from the COVID-19 pandemic. Visit our COVID-19 Resource Center for the latest insights and guidance.

[1] Quezada v. Circle K Stores, Inc., 2005 U.S. Dist. LEXIS 20217 (M.D. Fla. July 7, 2005) (Florida “does not recognize a cause of action for negligent transmission of a contagious or infectious disease”).

[2] Long v. Adams, 175 Ga. App. 538, 333 S.E.2d 852 (1985) (“At the very foundation of plaintiff's claim against defendant lie the principles of the law of tort. One who negligently exposes another to an infectious or contagious disease, which such other person thereby contracts, can be held liable in damages for his actions”).

[3] Mero v. City Segway Tours of Wash. DC, LLC, 962 F. Supp.2d 92 (D.D.C. 2013).

[4] Brian Chase, “An Analysis of Potential Liability Within the Adult Film Industry Stemming from Industry Practices Related to Sexually Transmitted Infections”, 23 Stan. L. & Pol'y Rev 213 (2012).

[5] To make it easier to argue that the release is an enforceable contract, the shop owner should also sign the release and provide a copy to the customer.

[6] La. Civ. Code art. 2004 (“Any clause is null that, in advance, excludes or limits the liability of one party for causing physical injury to the other party.”)

[7] California Civil Jury Instruction No. 425, “Gross negligence is the lack of any care or an extreme departure from what a reasonably careful person would do in the same situation to prevent harm to oneself or to others. A person can be grossly negligent by acting or by failing to act.”

[8] Express assumption of risk does not relieve the defendant of liability if there was gross negligence or willful injury. California Civil Code, § 1668. However, the doctrine of primary assumption of risk may then become relevant if an inherently dangerous sport or activity is involved. See Rosencrans v. Dover Images, Ltd., 192 Cal.App.4th 1072, 1081. (2011)

[9] California Civil Code Section 1714(a), “Everyone is responsible, not only for the result of his or her willful acts, but also for an injury occasioned to another by his or her want of ordinary care or skill in the management of his or her property or person, except so far as the latter has, willfully or by want of ordinary care, brought the injury upon himself or herself.”

[10] Levine v. Werboff, 2010 WL 3068926 (N.Y. Sup. Ct. May 21, 2010).

[11] Woodman v. Kerra, LLC, 785 N.W.2d 1 (Mich. 2010) (“refusing to enforce a liability waiver signed by the father of the injured child, because the father “possesses no greater authority to waive the property rights of his son . . . than he possesses to waive the property rights of any other nonconsenting third party, such as his neighbor or a coworker”)

[13] Id.

[14] Valero Energy Corp. v. M. W. Kellogg Constr. Co., 866 S.W.2d 252 (Tex. App.1993) (liability waivers not enforceable when enforcement would subvert the public policy of the state of Texas).