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  • 2020
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  • Can COVID-19 Liability Be Waived?

Can COVID-19 Liability Be Waived?

Stephen J. Henning and Patrick S. Schoenburg
September 1, 2020August 25, 2020 No Comments
FF Waiver Coronavirus

As COVID-19 restrictions lift across the United States and businesses reopen physical locations, owners and operators of facilities where in-person contact occurs are at risk for civil suits and claims for potentially exposing employees and customers to the coronavirus. In response to these risks, businesses and other institutions have asked employees, customers and patrons to sign liability waivers. In one of the most notable recent examples, President Trump’s reelection campaign asked supporters to execute liability waivers before attending a June rally in Tulsa, Oklahoma.

The practice has led many to wonder whether these waivers are enforceable. Each state interprets the enforceability of liability waivers differently. Apart from Louisiana, Montana and Virginia, every state generally accepts and will enforce liability waivers that meet certain requirements. Some states have enacted legislation to specifically address coronavirus-related liabilities. Georgia, Iowa, Oklahoma and South Carolina have passed legislation eliminating individual and business liability for civil claims relating to COVID-19. Other states, such as California and New York, have introduced legislation that would limit the potential liability of certain businesses and institutions, such as manufacturers and colleges.

Federal lawmakers are also debating the issue. Many Republicans have asked that liability protection for employers and business owners be included in proposed legislation to prevent businesses from closing, while Democrats believe this will give businesses an inappropriate “safe harbor” and encourage inadequate safety protocols.

Some states already find most liability waivers enforceable. This includes recognizing and enforcing waivers that protect a party from their own negligent conduct, including those arising from attendance or participation in certain events. Other states cite freedom of contracting principles to find in favor of enforcing waivers.

On the other hand, many argue that COVID-19 liability waivers are unlikely to be found enforceable if subjected to existing state contract laws and common law precedents. For example, states generally require that liability waivers be clear and unambiguous, and that each party to the waiver have equal or fair bargaining power. Some states invalidate waivers signed by parents that seek to waive personal injury claims of minors as a matter of public policy.

Further, most states invalidate liability waivers if the claim arises from conduct that is intentional, reckless or grossly negligent. Conduct that deviates sharply from the  ordinary standard of care or that constitutes a conscious disregard for the safety and rights of others will generally be deemed grossly negligent and the results of such conduct will not be protected by a waiver. However, because a person can be infected with COVID-19 without showing symptoms, it may be hard to prove that a company’s conduct was the direct cause of the infection, let alone that the company was grossly negligent in that regard.

General contract formation defenses will also likely be used to try to invalidate COVID-19 liability waivers. These include lack of consideration, prohibitions against contracts of adhesion, incompetence to enter into a contract (such as a contract entered into by or on behalf of a minor), breadth/vagueness, and public policy.

Waiver Best Practices

Almost all states will enforce liability waivers that meet their state-specific requirements. The fact that many states have enacted or introduced legislation eliminating civil liability for coronavirus claims may indicate that they will uphold COVID-19 liability waivers. Because courts have not yet had to address whether these waivers are enforceable, it may be a good idea to have all employees and patrons who will be on the premises execute a waiver, as it may shield businesses from liability.

At a minimum, liability waivers must be drafted in manner that guarantees that customers understand the risks associated with the business’s services and explicitly state the rights they intend to waive. In interpreting enforceability of liability waivers, courts generally agree: 1) the contract language must be construed strictly, as exculpatory language is not favored by the law; 2) the contract must clearly state the intent of the parties with specificity and no “words of general import can establish the intent of the parties”; 3) if there is any ambiguity, the contract will be construed against the party seeking immunity from liability; and 4) the burden of establishing immunity falls to the party seeking protection under the exculpatory clause.

Using these requirements, businesses should draft a liability waiver that clearly states the risks of exposure to COVID-19, as well as the risks associated with contracting the virus. It should expressly state that the customer fully understands these risks and is willing to assume them. It should also expressly state that the customer agrees to release the business from any claims and/or liability in connection with the risks associated with exposure to and contraction of COVID-19.

Advice from legal counsel licensed in the jurisdiction where the business operates is also critical. Many states abide by the general waiver requirements, but use unique tests to determine if such requirements have been met. In New York, for example, a liability waiver is enforceable only if it does not violate the public’s interest, the intention of the parties is expressed in unmistakable language, and the provisions are clear and coherent.

Regardless of legal and regulatory decisions around liability, businesses should keep in mind that waivers are not a substitute for good health and safety practices. The ultimate protection against liability is to operate in a manner that limits the spread of the virus.

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