Author: Jeff Lieser

The COVID-19 pandemic has taken all of us into uncharted waters. After an unprecedented near nationwide shutdown, many states are going through the process of reopening. For business owners, the ability to re-open is often crucial to the very survival of the business. At the same time, a business may have valid concerns about the possibility that an employee or customer could contract the virus while on the premises, resulting in the filing of a lawsuit against the business. In an effort to avoid costly litigation, some businesses are requiring workers and/or customers to sign a liability waiver — but do waivers actually work?

Are Waivers the New Normal?

Just as social distancing and wearing a mask in public have become the new normal, signing a liability waiver before returning to work or entering a business may also be commonplace going forward. The New York Stock Exchange is requiring traders to sign a waiver before entering the trading floor, while Walt Disney Co.’s website cites “severe illness and death” risks for customers at its Orlando, Florida, amusement parks. The Trump campaign even had attendees at a rally sign a waiver agreeing not to sue the campaign if they contract the virus.

Why Are Businesses Requiring Waivers?

Business owners are contemplating the use of waivers to avoid the very real possibility of costly litigation that could ensue if a worker or customer claims they contracted COVID-19 at the business.

Typically, workers are covered under workers’ compensation if they are injured or become ill on the job, but questions remain unanswered regarding Covid-19 coverage. In order to qualify for workers’ compensation benefits, a worker need not prove that the employer did anything wrong, only that the injury or illness is job-related. Illnesses like the cold or flu, however, are not usually covered under Florida’s workers’ compensation laws, because they are seen as a hazard of daily living. Though the Florida Department of Financial Services has issued a directive to honor Covid-19 claims made by frontline state employees (such as police officers, first responders, corrections officers, state healthcare employees, child safety investigators and active national guard members), this directive has not been categorically extended to all employees, which could leave employers vulnerable to negligence lawsuits if Covid-19 claims are treated like cold or flu claims. 

Customers have long been able to pursue a personal injury lawsuit based on the concept of premises liability if they were injured or became ill as a result of the business owner’s negligence. For a business that already suffered significant economic losses during stay at home orders, the prospect of a hefty damages award may be enough to implement the use of a liability waiver.

Does a Liability Waiver Really Work?

It depends. The basic idea behind a liability waiver in the context of the coronavirus pandemic is to protect a business from liability for damages if someone contracts the virus while working or visiting the business. In legal terms, this is accomplished by asking the person executing the waiver to “assume the risk” of contracting the virus. Can a waiver actually protect a business though? The answer is less than certain, – and depends on a variety of factors that are likely to change in the coming months.

Liability waivers have historically been limited by the courts in three important ways. First, only known risks can be assumed by the person signing the waiver –, meaning a waiver must clearly state the risks – (in this case, contracting COVID-19). Second, it must be a voluntary assumption of the risk.  Finally, a waiver must be consistent with public policy, which may present issues for both employee and visitor waivers due to the bargaining position between employees and employers, as well as certain businesses and visitors that are consumers.

Additionally, Florida courts have made clear that they will not enforce waivers that attempt to protect a business from actions arising from the business’s gross negligence or intentional acts.  Likewise, a waiver that requires an employee to waive the right to workers’ compensation or unemployment benefits is also unenforceable.

Should I Require a Waiver for My Business?

If you are a business owner who is concerned about your liability exposure during the coronavirus pandemic, it is in your best interest to consult with an experienced business law attorney before you consider utilizing a liability waiver. Additionally, business owners should carefully analyze the potential non-legal impact of requiring visitors or employees to sign waivers (i.e., potential effect on image). While a carefully drafted waiver may provide your business with some protection, it should be uniquely tailored both to your business and to the ever-changing laws relating to COVID-19. 

On April 3, 2020, the Paycheck Protection Program was established with the intent to support small U.S. businesses during the COVID-19 pandemic. Program funding was depleted within a few days, in part, because some of the loans were distributed to companies that were not the intended recipients. The Paycheck Protection Program received an additional $484 billion on April 24, 2020, when President Trump signed a second COVID-19 rescue bill.

Problem with the Original Paycheck Protection Program Structure

As originally structured, there was an inherent flaw in the Paycheck Protection Program (PPP). Under PPP requirements for loan forgiveness, businesses had to spend 60% of the loans on payroll with the other 40% on rent, mortgage, interest, or utilities within 8 weeks of receiving the funds. For struggling businesses that had been forced to close due to the pandemic, there was no payroll, which meant that the loan could not be forgiven. 

Issue Rectified with Second Payroll Protection Program Structure

The second COVID-19 rescue bill extended the timeframe that businesses were required to use the funds from 8 weeks to 24 weeks. As states allow businesses to reopen, more small businesses can seek forgiveness of the loans under the federal guidelines. However, challenges still remain. 

During an interview with WFLA News, Jeff Lieser, an attorney at Lieser Skaff Alexander, said that while the Small Business Administration (SBA) has a guide for loan forgiveness, this process is dense and difficult to understand. Mr. Lieser urges businesses to stay in contact with their lender and to ask questions about any part of the process that is unclear. In addition, Mr. Lieser encourages business owners to continually review the Frequently Asked Questions (FAQ) of the SBA’s website to stay current of changes and updates to the loan program. 

Loan Forgiveness Process

The main purpose of the Paycheck Protection Program was to ensure that small businesses could continue operations during the shutdown but qualifying for loan forgiveness is a complex process. Business owners must be prepared to provide their lenders with complete and detailed documents of how the loan funds were spent and prove that the disbursement complied with the payroll percentage requirement.  For businesses that utilize payroll programs or third party payroll process companies, this part of the process may be simplified but rent, interest, and other expenses must also be fully documented. 

Mr. Lieser encourages business owners who are having difficulty documenting their qualifications for loan forgiveness to contact an attorney specializing in business law to support them in this process.