July 28, 2020

With many businesses opening back up after shut-downs and stay-at-home orders, companies are understandably concerned about customers and/or employees contracting COVID-19 on the premises.  While all these companies are undoubtedly instituting various new health and safety procedures, some are looking to limit their potential liability for COVID-19 exposure even further, by use of liability waivers.

Liability waivers are generally documents signed by individuals acknowledging the risks involved in a certain activity and releasing a business or property owner from liability relating to that activity.  Many people are familiar with the concept of liability waivers for higher-risk activities, such as participation in adventure and sport activities like horseback riding, jet-skiing, and gym memberships.  But because of the nature of COVID-19, individuals are at risk of contracting the disease doing relatively mundane, day-to-day activities, such as shopping, eating at restaurants, and even going into the office for work.  Some of these businesses are therefore having customers, and even employees, sign liability waivers before entering the premises or reporting to work, releasing the company from liability if they are exposed to and/or contract COVID-19 while on the premises.

Liability Waivers in California: In California, liability waivers are generally enforceable, but are narrowly construed and limited in their effectiveness.  For instance, any waiver must be carefully drafted and clearly specify what is and is not being waived.  Overbroad waivers with general language will likely not suffice.  For certain industries owing a duty to the public, waivers might not be allowed at all.

Further, waivers can only limit liability for a company’s ordinary negligence.  They do not apply to gross negligence, or willful, intentional, or wanton conduct.  So if someone could trace a COVID-19 outbreak back to a specific restaurant, and prove that the restaurant was not complying with social distancing requirements and the servers were not wearing face masks, a signed waiver would not necessarily shield the restaurant from liability.

Employee Waivers: Any liability waiver signed by an employee as a condition of returning to work is likely to be unenforceable.  Waivers in the employment context are disfavored, due to the unequal bargaining power between employees and employers.  Just last year for instance, the state legislature passed Assembly Bill (“AB”) 51, which would have prohibited employers from requiring employees to sign away their right to sue for employment-related claims in court.  (The law is currently being challenged in court.)

Such waivers are also likely to be unenforceable because of the state workers’ compensation program.  Employees who get sick or injured on the job are normally compensated through workers’ compensation (rather than through the courts), and in California, employees cannot sign away their rights to pursue workers’ compensation claims.  In fact, California has passed a law specifically about workers’ compensation and COVID-19.

Getting Workers’ Compensation Coverage for COVID-19 in California

Forcing employees to sign liability waivers before reporting to work may discourage many employees from returning to work at all, and may open up businesses to negative publicity.

A better approach might be to have employees agree to comply with COVID-19 safety rules, such as taking their temperature and verifying they are symptom-free before coming to work, and maintaining social distancing, wearing face masks, and frequently washing their hands while at work.

Customer Waivers: Liability waivers are far more likely to be enforceable when customers and non-employees are asked to sign them.  However, companies should remember that such waivers are limited in their scope (as discussed above), and should also consider whether requiring such waivers will harm their businesses by driving away customers.

Again, a better approach might be to have people entering the premises answer questionnaires regarding COVID-19 symptoms and/or exposure, and/or post a notice listing the restrictions on entry and the company’s efforts to comply with health and safety orders and other safety procedures, which could be used to show the affirmative steps the company took to limit exposure to COVID-19.

Regardless of whether COVID-19 liability waivers are enforceable, businesses have an obligation to ensure a safe and healthy environment for both employees and customers.  Businesses must make sure they are in compliance with all federal, state, and local orders and regulations, and follow guidance from the Centers of Disease Control (CDC), Occupational Safety and Health Administration (OSHA), and local health departments.

Pending Legislation: The state legislature has already passed numerous new laws relating to COVID-19, and many laws have also been proposed and are awaiting review.  One such piece of pending legislation, AB 1035, would provide immunity to small businesses if individuals contracted COVID-19 while at the premises.  Similar to liability waivers, however, businesses would not be immune from liability for their gross negligence, willful or wanton misconduct, or unlawful discrimination.  Another pending bill, AB 1552, would provide financial relief to small businesses whose business interruption claims resulting from COVID-19 have been denied from insurance carriers.

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ESKRIDGE LAW may be contacted by phone (310/303-3951), by fax (310/303-3952) or by email (geskridge@eskridgelaw.net).  Please visit our website at eskridge.hv-dev.com.

This article is based on the law as of the date posted at the top of the article.  This article does not constitute the provision of legal advice, and does not by itself create an attorney-client relationship with Eskridge Law.