Virginia Phase 3 Reopening: Will a COVID-19 Liability Waiver Protect Your Business from Legal Risks?

Employment Law

Virginia Phase 3 Reopening: Will a COVID-19 Liability Waiver Protect Your Business from Legal Risks?

Jul 6, 2020 | Employment Law

Virginia governor Ralph Northam announced that Phase 3 of the Forward Virginia reopening plan will get underway on July 1, 2020, lifting more of the restrictions on businesses and public activities due to the COVID-19 pandemic. With the Commonwealth’s move toward expanded reopening options, many Virginia businesses, in particular retail and services entities, have become increasingly concerned about the potential of being sued by a customer for damages related to COVID-19 exposure.

Do I need a COVID-19 Liability Waiver?

The anxiety is not misguided, given the crazy-quilt of federal, state, and local COVID-19 guidelines and regulations applicable to most businesses, and the absence of a vaccine or other means of effectively preventing the spread of a highly contagious virus. Even politicians have become focused on trying to reign in COVID-19-related liability. Recently the Trump reelection campaign required all attendees of its Tulsa, Oklahoma, rally to sign a waiver and “assume all risks related to exposure to COVID-19.”

The great uncertainty surrounding COVID-19 has left many business owners asking: Would a liability waiver from a customer help shield my business from potential damages? Because waivers are interpreted under state law, the answer requires a review of the Virginia legal theories relating to liability waivers – waiver and assumption of risk.

Is a Pre-Injury Waiver of Liability Enforceable in Virginia?

At its most basic, a liability waiver is just a contract for a particular purpose. Virginia law generally “looks with favor upon the making of contracts between competent parties upon valid consideration and for lawful purposes.” However, contracts that violate Virginia public policy are void and unenforceable. Pre-injury waivers of liability for future negligent acts or omissions are just that kind of contract — against Virginia public policy and unenforceable — for two primary reasons:

(1) the party suffering personal injury is barred from seeking a recovery from the wrongdoer, likely depriving the injured party of all possibility of recovery; and

(2) the released party’s motivation to exercise ordinary care to prevent harm to the releasing party may be diminished because the possibility of legal liability is removed.

To hold otherwise, a Virginia court concluded more than a century ago, would essentially license one party to put the other parties to the contract at the mercy of its own misconduct, which should never be encouraged by the law. Thus a pre-event waiver of liability signed by triathlon event participants that purported to “waive, release and forever discharge any and all rights and claims for damages which I have or may hereafter accrue to me against the organizers and sponsors . . . for any and all injuries suffered by me in said event[,]” was against Virginia public policy and unenforceable. It did not bar the estate of an event participant who died while participating in the triathlon from recovering damages against the event organizers.

Virginia is an outlier, one of only a few states that does not permit the use of pre-injury liability waivers. For this reason, even with all of the uncertainties and nearly insurmountable difficulties that businesses are facing in trying to maintain a safe and healthy environment during the COVID-19 pandemic, long-standing legal precedent makes it unlikely that Virginia would enforce a pre-injury waiver of liability for damages that includes language attempting to waive COVID-19 damages resulting from a business owner’s negligence or intentional acts or omissions.

Can I Require Customers to Assume the Risk of Contracting COVID-19?

Even if Virginia does not permit pre-injury waivers of liability, will it pass legal muster for a business to contract with its customers to have those customers assume all risks of injury that may arise from contracting COVID-19? Recall that President Trump’s campaign reelection organization required recent Tulsa rally attendees to agree to “assume all risks related to exposure to COVID-19.” If the rally had been held in Virginia, instead of Oklahoma, would the campaign’s assumption of risk provision have been enforceable? Probably so.

Under Virginia law, a person’s voluntary assumption of the risk of injury from a known danger operates as a complete bar to recovery for a defendant’s alleged negligence in causing that injury. To assume a risk, the injured party must:

(1) fully appreciate the nature and extent of the risk; and

(2) voluntarily incur the risk.

The focus of the analysis is on the actual risk alleged to have caused the injury, not merely the risks that may be inherent in an activity.

With that in mind, one Virginia court found that an injured party could fully understand and voluntarily assume all general risks attendant to an amusement park water slide, but still not subjectively appreciate or assume the risk that an amusement park employee’s inattention would create a risk that resulted in serious personal injuries to the individual.

Similarly, a second court concluded that an individual who drowned during an underwater dive hosted by a scuba instruction outfit assumed all of the potential risks of injury arising from underwater diving, but still did not subjectively appreciate and, therefore, could not have voluntarily assumed the risk that a dive outfit employee would look away from the deceased at the moment she became separated from the dive group during the dive. Courts focus on the subjective state of mind of the injured party, i.e., what risks the injured party appreciated, and not what a reasonable person would have known.

In the context of the COVID-19 pandemic, let us consider what language might a Virginia business rely upon to create an effective assumption of risk of injury from a customer? While COVID-19 is still far too new to be able to predict with much certainty what Virginia courts might end up deciding, an assumption of risk waiver of liability between the ABC Company and a customer could look something like this:

ASSUMPTION OF RISKS

  • ABC Company adheres to applicable federal, state, and local COVID-19 guidelines and regulations and has implemented a number of health precautions for the protection of its customers and employees, including daily health screenings, temperature checks, face masks, social distancing measures, sanitizing and disinfection measures, and various other precautions. However, the CDC and World Health Organization have classified COVID-19 as a highly contagious and dangerous disease. ABC Company cannot eliminate the risk of Customer contracting COVID-19.
  • Customer is fully aware that using ABC Company’s services and/or being present on its premises carries with it certain inherent risks related to COVID-19 transmission (“Inherent Risks”) that cannot be eliminated regardless of the care taken to avoid such risks. Inherent Risks may include, but are not limited to, (1) the risk of coming into close contact with individuals or objects that may be carrying COVID-19; (2) the risk of transmitting or contracting COVID-19, directly or indirectly, to or from other individuals; and (3) injuries and complications ranging in severity from minor to catastrophic, including death, resulting directly or indirectly from COVID-19 or the treatment thereof.
  • Customer further understands that the CDC has determined that certain risk factors, such as advanced age (65 or older), and certain underlying medical conditions, including kidney disease, COPD, immunocompromised state, obesity, heart conditions, sickle cell disease, diabetes, asthma, cerebrovascular disease, cystic fibrosis, hypertension, liver disease, pregnancy, pulmonary fibrosis, and smoking, increase the risk for severe illness from COVID-19.
  • Customer acknowledges that the risks of COVID-19 are not fully understood, and that contact with, or transmission of, COVID-19 may result in risks including but not limited to loss, personal injury, sickness, death, damage, and expense, the exact nature of which are not currently ascertainable, and all of which are to be considered Inherent Risks.
  • Customer hereby voluntarily accepts and assumes all risk of loss, personal injury, sickness, death, damage, and expense arising from such Inherent Risks.

What Should My Business Do to Help Avoid Liability?

Even with a waiver of liability that seems to make it clear in every reasonably conceivable way that ABC Company’s customer is assuming all risks of personal injury relating to COVID-19, the risks to your business still may not be fully mitigated. As the amusement park water slide and scuba diving examples above highlight, no waiver of liability, assumption of risk, or other means of trying to limit COVID-19 losses is ironclad. Nor can they effectively substitute for the need to liability by making every effort to maintain a safe business environment for your customers. The place to start your safe practices planning is by ensuring that your business premises are in full compliance with federal, state and local laws, regulations, and executive orders, and adhere to the guidance issued by the CDC, Occupational Safety and Health Administration, Equal Employment Opportunity Commission, and Virginia Department of Labor and Industry.

If you have questions or need any assistance, please contact Doug Taylor at (703) 525-4000 or rdougtaylor@beankinney.com.

This article is for informational purposes only and does not contain or convey legal advice. Consult a lawyer. Any views or opinions expressed herein are those of the authors and are not necessarily the views of any client.

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