Article contributed by Paul P. Rooney and Joanna R. Cohen, Ellenoff Grossman & Schole LLP
COVID-19 liability waivers cannot provide immunity to the business from all lawsuits or protections from employees’ claims under workers’ compensation laws or workplace safety laws.
Such waivers may, however, limit or even prevent liability for negligence and, accordingly, are well worth considering as part of a business’s comprehensive effort to limit COVID-19 exposure and claims arising from it.
Waivers for Customers and other Visitors to a Business
Businesses most frequently use liability waivers to protect themselves from liability for recreational activities that are inherently dangerous (i.e. use of gym or sporting equipment). In other contexts, however, where an activity a person wants to undertake involves a known risk, it is reasonable to ask that person to acknowledge and assume that risk. In the case of COVID-19, restaurants in particular have both a reasonable concern that their visitors could seek to hold them liable for illness and a reasonable desire to have visitors bear a fair share of that risk in order to obtain the benefits of visiting the restaurant.
A robust waiver for a customer, vendor, or other visitor should contain: a) clear information on the safety protocols the restaurant will follow; b) a statement that the visitor is aware of and accepts the inherent risk; c) a promise that the visitor will not sue the restaurant; and d) an explicit waiver of the visitor’s right to sue, and an indemnification provision providing that the visitor agrees to pay for any claims against the restaurant related to the customer.
The protection afforded by such a waiver, however, has limits. Notably, such waivers do not apply to intentional, reckless, or grossly negligent conduct. Accordingly, regardless of whether customers sign a liability waiver, if a business is not using reasonable safety precautions, such that the business could be considered reckless or grossly negligent, even an enforceable waiver will not shield the business from liability.
The enforceability of liability waivers is a matter of state law, and accordingly the enforceability of such waivers will vary from state to state. At least three states (Louisiana, Montana and Virginia) flatly do not enforce liability waivers.
Most states have adopted certain tests that a court will apply to determine whether or not a waiver is enforceable. For example, under New York law, a liability waiver is enforceable if (1) it does not violate public policy, (2) the intention of the parties is clear and unmistakable based on the language of the waiver, and (3) the waiver’s provisions are “clear and coherent.” Thus, a waiver must very clearly explain the risks associated with dining at the restaurant and the rights that the customer is agreeing to waive. Courts have not yet ruled on any COVID waivers so it is not clear if such waivers will be enforced in this context or if such waivers will be deemed void as against public policy.
Practical concerns limit the usefulness of liability waivers for restaurants. Customers may be reluctant to sign such a waiver and courts are not likely to enforce a waiver based on mere signage.
Any feelings of vulnerability restaurants may have regard to COVID-19 claims should be assuaged somewhat by the great difficulty of proving that a visitor to a restaurant caught COVID-19 there and that the illness resulted from negligence.
Liability Waivers for Employees
COVID liability waivers cannot protect business from claims by their employees. Such protection is, however, not necessary because workers’ compensation laws protect business from virtually all personal injury claims by making workers’ compensation benefits employees’ sole remedy for workplace illnesses and injuries.
For example, in New York, Section 11 of the New York Workers’ Compensation Law provides that “[t]he liability of an employer prescribed by [§ 10 of the Law to pay workers’ compensation benefits] shall be exclusive and in place of any other liability whatsoever, to such employee…” Under workers’ compensation laws, employees cannot sue in court for unintentional workplace injuries and illnesses. Thus, a business does not require a liability waiver to be protected from COVID-19 lawsuits by employees – a waiver is inherent in the workers’ compensation law.
In light of that, businesses may ask, “Can employees waive their rights to bring workers’ compensation claims? The answer is “no.”
The other main source of potential liability from claims by employees arising from COVID-19 is the federal Occupational Health and Safety Act (“OSHA”). In general, OSHA requires employers to provide workplaces free from conditions that are likely to lead to serious injury or death. Like workers’ compensation protections, employees cannot waive the protections provided by OSHA. An executive order of the President, however, encourages OSHA to accept good faith compliance efforts and to take enforcement action only when good faith compliance efforts are absent.
In summary, liability waivers do have a role in protecting businesses from claims arising from COVID-19, but their utility is limited. They certainly are no substitute for vigilant efforts to prevent COVID-19 exposure.
Paul P. Rooney is a Partner at Ellenoff Grossman & Schole LLP. He specializes in employment law and civil litigation, and advises clients about their legal rights and responsibilities, drafts employment agreements, handbooks, and policies, and performs employment-related corporate due diligence. His cases have included numerous collective actions under The Fair Labor Standards Act, and claims under Title VII of the Civil Rights Act of 1964, and The New York State and City Human Rights Laws. Mr. Rooney has also litigated cases involving covenants not to compete, claims of breach of contract and breach of fiduciary duty, and defamation.
Joanna R. Cohen is an associate in the Litigation Group at Ellenoff Grossman & Schole LLP. Her experience includes representation of clients in litigation in federal and state courts. Ms. Cohen also worked as an Assistant Attorney General for the State of New York defending the State in litigation in federal and state courts.