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Waivers of Liability from COVID-19, Not All They Are Cracked Up to Be

By: W. Kirby Bissell

Waivers of Liability from COVID-19, Not All They Are Cracked Up to Be

A waiver seems like a good idea to address potential liability for your dealership from COVID-19 related exposure, but it may create more problems than its ultimate value.

First, let’s examine the bigger picture here. COVID-19 related lawsuits against dealerships are likely to come from two distinct sources: one, employees filing workers’ compensation claims against dealerships; and two, customers suing dealerships for claims of negligence. An employee’s waiver of his or her ability to file a workers’ compensation claim is void against public policy and unenforceable. On the other hand, a waiver may be successful in defeating negligence claims by customers, but only to a point. In the vast majority of states, waivers are only effective for avoiding liability for ordinary negligence or the failure to exercise reasonable care. Waivers are wholly ineffective at defeating claims for gross negligence or reckless and wanton conduct.

Furthermore, in practice, even a valid waiver will not stop an attorney from filing a lawsuit on behalf of customer exposed to COVID-19 at your dealership, even for a claim of ordinary negligence. Instead, an experienced injury attorney will argue that the waiver is invalid, obtained unfairly or inapplicable because your dealership was guilty of more than simple negligence. In many instances, these allegations will be enough to avoid dismissal of the lawsuit before discovery. Thus, a waiver by itself is not going to avoid lawsuits entirely or bring them to speedy resolution, thereby limiting its benefit.

Next, let’s consider the practical implications of your dealership implementing a waiver for customers. In examining these two major considerations, it becomes clear that waivers may generate more problems than solutions.

First, requiring customers to execute a waiver upon entering your dealership comes with a host of obvious public relations and customer perception issues. If a potential customer comes to your dealership to consider purchasing a product or service and his or her first interaction with your staff involves being asked to execute a legal waiver, is this the tone you and your staff want to set?  Surely, such an interaction is not conducive to your dealership convincing the customer to give you his or her business. Moreover, customers may also question why they are signing a waiver at your dealership, when in our experience, there are no other retail businesses requiring waivers from patrons. It is sure to raise some eyebrows.

Second, implementing a waiver may create a false sense of security in dealership employees. From the beginning of this pandemic, our advice has been that the best way to avoid potential liability for COVID-19 exposure is a robust education, awareness and sanitization program and vigilant enforcement of the guidelines that United States Centers for Disease Control and Prevention or CDC has published to prevent spreading the virus (i.e., disinfecting, social distancing, mask-wearing, frequent handwashing, etc.).[1]  There is a very real possibility that having customers execute a waiver will make these important practices seem less necessary to employees and disincentivize them from strictly adhering to and enforcing the CDC’s best practices on themselves and customers. Thus, a waiver may create a situation where the actions of dealership employees (or perhaps, the lack thereof) result in a greater likelihood that the dealership is found to have been more than just simply negligent, rendering any waiver wholly ineffective.

To avoid both of these adverse implications, the best strategy to minimize any potential exposure from COVID-19 related lawsuits is widespread adherence to the CDC’s guidelines.  Further, dealerships must also thoroughly document their adherence to the same. Creating a written, contemporaneous record of the steps your dealership is taking on a daily basis to minimize the potential for COVID-19 exposure on its premises is vital to avoiding liability in a lawsuit.  Such documentation is also the type of strong evidence that will make an injury attorney think twice about pursuing claims against your dealership in protracted litigation.

Finally, while there is a legitimate concern across the country that businesses are going to see a significant increase in COVID-19 related injury litigation, we are unconvinced that this increase in litigation will result in many businesses being found liable and ultimately having to pay damages to a customer exposed to COVID-19. This is because actually proving that an individual contracted COVID-19 from a specific location will be extremely difficult. This is a very real, practical obstacle to these claims being successful and we do not foresee this burden being easily met in most situations, absent some very special factual circumstances.

 

[1] The full resources available to businesses from the CDC can be found at the following web address https://www.cdc.gov/coronavirus/2019-ncov/community/organizations/businesses-employers.html.  Further, dealerships should also consider any stricter guidelines or rules imposed by their state or local governments.

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