May 15, 2020

To waiver or not to waiver, that is the question

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Through the years, we have all gotten used to liability waivers. You know, the things that you sign that say the business isn’t responsible if you get hurt. If you are a parent, you have inked them for every team your kid has played on and at every facility you frequent. Adults sign them at potentially risky places like racetracks, horseback riding venues, and sky diving enterprises (gulp). Businesses faced with the specter of lawsuits from COVID-19 may be wondering if they should make customers sign them. As you probably know, both the Arizona legislature and Congress are working on passing separate measures to provide businesses with some protection from what I’ll call “zealous” members of my brethren itching to instigate litigation.

However, until these measures are more concrete, a liability waiver certainly can’t hurt.

First, let me clarify what we aren’t talking about here. You shouldn’t be using these for employees. Employers are in a near-impossible predicament right now --- having to digest hundreds of pages of guidelines, instituting new procedures, and dealing with laws that haven’t applied to them before. It’s a mess and very stressful. A waiver seems like a simple solution, right? If I had a game show buzzer, here is where I would buzz in. Instead, I will just say “sorry, no”. An employee waiver is likely unenforceable. As an employer, it’s your job to make a workplace safe under the Occupational Safety and Health Administration Act (“OSHA”). Making employees sign a waiver could be, in effect, an admission that your workplace is not safe. Don’t do that. But you must stay abreast of changing regulations. You should have the right policies and know about the ever-changing FAQs on the websites of the Department of Labor, OSHA, Equal Employment Opportunity Commission, and the Centers for Disease Control. I’m sorry to say, it is changing daily and difficult for all of us to stay on top of.

What about customer waivers, though?  This is where I see some benefit.

So, let's talk about Arizona. I’m not going to quote a case and will keep this at a high level. Arizona law does let parties contract to or agree about who will bear the risk of an injury caused by the other party’s negligence. However, the Arizona Constitution has a provision that says the enforceability of this kind of an assumption of the risk is always a question of fact for a jury to decide. Whether a waiver will be valid depends on an assessment of public policy and whether the parties bargained for the limitation of the liability in that contract. The test for the public policy analysis has a few factors including whether there was unequal bargaining power between the injured person and the business. On the bargaining part of the assessment, a jury has to determine if the risk was one specifically set out in the waiver and if the injured intentionally waived the right.

What does all this mean? In short, waivers won’t get you out of lawsuit completely (because there is a question of fact there), but a well-crafted waiver could give you a shot at winning the day. Plus, don’t forget that some of the benefit is in the psychological effect of signing a waiver.

What can you do to increase the chance your waiver will work?  

  1. Keep it simple but precise. Tailor the waiver to your business and the activity. The broader it is, the riskier it is. Be specific about the particular risks customers are waiving.  
  2. Make sure it has clear, plain, unambiguous language and is easy to read.  
  3. Your customer must acknowledge he or she understands and accepts the risks voluntarily. Consider making the waiver language ALL CAPS AND BOLD.  
  4. If you are warning customers at the business, make sure that’s reflected in the waiver and reinforced physically (for example, with posted signs) in your space.  
  5. Train your employees well so they get waivers signed.  
  6. I suggest using a general waiver and then having a specific COVID section to be initialed. You can continue to use the waiver without the COVID provision after the pandemic passes.

Let’s hope the Arizona legislature and Congress move quickly to offer some protection for businesses but, as with anything political, you can’t count on it. In the interim, I think a customer waiver is not a bad bet in quite a few industries.