Legal Insights

Online Fitness in the COVID-19 Era: How to "C.U.R.E." Online Waivers and Protect Your Business from Liability

April 5, 2020
By: Daniel S. Altschuler, Christopher D. Gee, and Kosta Patsiopoulos

The impact of COVID-19 thus far has been far-reaching – not just in its public health impact, but also how it has changed daily life for us all. One example is the shift from traditional face-to-face, in-person gym, yoga, and Pilates classes, to participation in these types of classes via online streaming and video conferencing applications such as Zoom, Skype, WebEx, and others.

However, while many gyms, yoga, and Pilates studios have been able to adapt their business’ strategies and engage in an online forum to generate income during the shutdown, the changes to their waivers of liability and waiver process have not kept pace.

Before the shutdown brought on by COVID-19, most fitness enterprises had participants execute waivers of liability to protect the entity from lawsuits arising out of their activities that took place inside gyms and studios. However, these waivers of liability, in most instances, did not contemplate online classes and the potential for exposure created by these classes. Consider a fact pattern involving a gym offering personal and group training classes.

John Doe is an active gym member and regularly attended a weekly high-intensity interval training course involving a single trainer providing instructions to a class of 10 members using equipment provided and set-up by the gym. However, due to the state-mandated COVID-19 closures, the gym is now offering members an option to stream the courses from their home. John registers for the high-intensity interval training course with the trainer providing demonstrations of exercises through a video stream. During the class the trainer instructs the participants to perform box jumps and demonstrates the exercise using the approved wooden box at the gym facility from where he is broadcasting. John attempts to perform the exercise at home but does not own the approved wooden box so he instead decides to use his coffee table. During the exercise the coffee table breaks causing John to fall and fracture his arm. He sues the gym for negligence in failing to provide proper instruction and/or supervision, among other allegations.

The above fact pattern creates issues unique to online, streaming courses. The gym could not control the equipment utilized by the participant and the trainer was unable to observe the activities performed to identify potential issues/hazards and correct them, problems that would not occur in a traditional in-person setting.

Given the types of risks unique to online forums, business owners and operators need to understand the potential interpretation of waivers in the context of any online services they offer. They also should pursue guidance on the applicable language and drafting of these waivers to account for new risks, protect the safety of the customers and clientele, and mitigate against future litigation.

Analyzing case law as it exists regarding waivers generally, with a spotlight on the law under New Jersey and Pennsylvania, combined with insight on potential interpretation of waivers in the context of online activities and electronically executed waivers, the guidance regarding online waivers for business owners becomes clearer.

Online Waivers and the Law

Liability waivers are necessary to insulate businesses from liability related to injuries suffered by their customers either on the premises exercising, or in this case, participating in exercise classes or instruction at home via video stream.

Pennsylvania Courts will enforce waiver agreements or exculpatory clauses where three conditions are met.

1. The clause must not contravene public policy;
2. The contract must be between persons relating entirely to their own private affairs;
3. Each party must be a free bargaining agent to the agreement so that the contract is not one of adhesion.

Importantly, as recently as 2019, the Supreme Court of Pennsylvania held that an electronically executed liability waiver was enforceable. See Valentino v. Phila. Triathlon, LLC, 209 A.3d 941 (Pa. 2019).

New Jersey Courts will also enforce waiver agreements or exculpatory clauses where similar conditions are met:

1. The clause does not adversely affect the public interest;
2. The exculpated party is not under a legal duty to perform;
3. The clause does not involve a public utility or common carrier;
4. The contract does not grow out of unequal bargaining power or is otherwise unconscionable.

Bottom-line - nothing in the laws of Pennsylvania or New Jersey bar a business from requiring an electronically executed waiver so long as the waiver is not in violation of the pre-established conditions.

Drafting Solutions

In light of the COVID-19 pandemic, the best way to address potential issues that may arise from using your existing waivers as it relates to online classes is to think about a “C.U.R.E.” Your waivers should be Clear, Unambiguous, Recognizable, and Explanatory. Specifically, your waivers should:

• Clearly state that the participant must release from liability, indemnify, and agree not to sue the parties designated therein in order to participate in the foregoing online activity;
• Unambiguously state that the participant must read the entire document before signing it. Think about utilizing different fonts from the rest of the document or using bold or capital letters. Also, instead of a handwritten or typed signature, use a box to click, which should be located at the end of the document to force users to scroll through the entire document before signing it;
• Recognizably alert the participant that this is a legal document and they are giving up substantial rights by signing it. This can be accomplished by specifically stating that this is a legal document and they are giving up rights; and
• Explain there may be other risks not known or not reasonably foreseeable to the released party and that before participating the participant agrees to inspect their facilities and equipment to be used, and if they think anything is unsafe, immediately stop the exercise.

Practical Solutions

While you can draft the perfect online liability waiver, you still need to ensure it is enforceable against the executing party in litigation. Authentication of the executing party’s signature is a significant hurdle for enforcing liability waivers.

For example, in California where online signatures may be valid under existing law, courts have denied enforcement of liability waivers because the proponent failed to authenticate the waiver. See Crannage v. Gym, CV 18-08063, 2019 LEXIS 226915 (C.D. Cal. November 6, 2019). To properly authenticate the waiver, the proponent needs to prove that the executing party actually signed the liability waiver electronically. An electronic signature with a date and time stamp itself is not enough.

To navigate these authentication issues, the following practices are recommended when requiring customers to execute online liability waivers:

• Create evidence showing the customer actually reviewed and accessed the online liability waiver. This means placing the full text of the waiver on the customer’s screen so that the customer must scroll down through the entire waiver before the customer gives consent. Avoid situations where the text of the waiver is on a separate page that the customer does not need to click or access before giving consent. Prove that the customer would not have been able to access the consent portion of the waiver without having reviewed the preceding waiver language in its entirety.
• Avoid ambiguity when asking for your customer’s consent. Instead of asking the customer “to sign” or stating “by signing,” use language reflecting what the customer actually needs to do to give consent. For example, the waiver could indicate consent using the language “by checking the box below” or “by typing your full name” as it was entered previously in the online waiver to ensure the consent is properly authenticated.
• Ensure your consent agreement includes language where the customer confirms he or she has read the text of the waiver. For example, “I certify that I have reviewed all of the above terms of the Agreement, and by checking the following box, I hereby consent and agree to all of the above terms.”
• Draft your online liability waiver so that there are no conflicting provisions. Courts are reluctant to enforce agreements where conflicting provisions exist.
• Ensure your customers have actually executed the online waiver before any customer is allowed to participate in classes or instruction. A customer should not be able to register for a class unless the customer executes the online waiver.
• Provide a full executed copy of the liability waiver to the customer, either through e-mail or in-app viewing. This creates evidence that the customer had the opportunity to review the waiver and consent to be bound by the waiver still existed when the potential injury or liability creating event occurs.
• Refuse to work with any registration service which does not allow you to modify the waiver to fit your business. Each of your businesses has unique clients and service methods, and your online liability waiver should not be solely dictated by the registration service you choose to employ.

Conclusion

The COVID-19 pandemic will continue to cause disruption to businesses that depend on customers and clientele to have a physical presence at their place of business for services to be purchased and delivered. This is especially true for gyms, personal training, group training, and other exercise-oriented ventures. Prudently so, these businesses will pursue online/streaming strategies to ensure delivery of services to their clients and the businesses’ financial viability. While it is important to adapt business practices in response to the COVID-19 pandemic, businesses must understand how their exposure to liability may change with new service delivery models. Importantly, these businesses must adjust their online waivers and related processes to account for the rapid shift in service delivery models and associated potential liabilities.