Locke Lord QuickStudy: COVID-19 Liability Waivers and Releases for Independent Contractors

Should a business require independent contractors to sign advance waivers and releases of liability for contracting COVID-19? Whereas most commentators have urged companies to refrain from requiring employees to sign such waivers and releases, there is little reason not to require independent contractors to sign well-drafted COVID-19 liability waivers.

Unlike employees, who may be covered by workers’ compensation or other laws that forbid employers from using employee waivers for work-related injuries and illnesses, independent contractors (ICs) are typically not covered by such laws.

ARE COVID-19 WAIVERS EFFECTIVE?

While some states preclude the use of advance waivers in selected industries such as amusement parks, recreational activities, parking lots, and caterers, those laws generally apply to customers and not to independent contractors.     

Advance waivers and releases, though, are usually not effective to protect against gross negligence, recklessness, or intentional acts. And typically they need to expressly cover the specific negligent acts that may cause an injury or illness. Generalized waivers of negligence are oftentimes stricken by courts in many states. Courts also require waivers to be written in clear and unambiguous language.  These types of limitations require the drafting party to closely examine applicable state laws regarding advance waivers.  

WHAT SHOULD A COVID-19 WAIVER AND RELEASE FOR IC’S CONTAIN?

A company drafting a COVID-19 waiver and release for independent contractors may wish to include language whereby the contractor acknowledges the inherent risk of contracting COVID-19 in providing services on an in-person basis to a company or its customers. Such assumption of the risk provisions oftentimes have some legal value even if a waiver and release is not enforced.

A company should also consider including in a COVID-19 waiver a provision whereby independent contractors represent and warrant that they agree to follow guidelines issued by the Centers for Disease Control (CDC) and any state or local COVID-19 laws including those regarding the use of masks and social distancing. 

Companies may also wish to include an agreement by the contractor not to engage in in-person activities with employees or customers of the company if the independent contractor has a fever or any COVID-19 symptoms, recently has been in contact with another individual who has been diagnosed with COVID-19 or has exhibited such symptoms, or not long ago traveled to a state or country that is on a list of jurisdictions requiring the individual to self-quarantine upon return. 

When a business contracts with independent contractors to provide services to its customers, the company may wish to create a three-party waiver and release agreement between it, the customer, and the contractor. In such an agreement, all parties waive and release claims against the other parties from specific acts of negligence that may lead to one of the parties contracting COVID-19. Companies may wish to include a provision in such agreements that all signatories agree to follow CDC guidelines to the extent feasible as well as all state and local COVID-19 laws.

Some companies may contemplate including indemnification provisions and covenants not to sue in COVID-19 waivers with independent contractors and their customers. But the longer and more complex the waiver form, the more hesitant an independent contractor or a customer may be to sign the document, which ideally should be on a single page.  

NEED TO ENHANCE IC COMPLIANCE 

A worker classified as an independent contractor who signs a COVID-19 waiver and later on acquires the illness may still claim the waiver is invalid. How? By asserting that he or she was misclassified and is actually an employee covered by workers’ compensation. Such a claim is more likely to be made in states that have enacted laws creating a presumption that the illness was contracted at work for employees in certain industries or positions. According to an article published by the National Conference of State Legislatures in June, six states by then had enacted legislation creating a presumption of coverage for various types of workers who claim they contracted COVID-19 in a work-related setting. 

Thus, a company that chooses to use a COVID-19 waiver and release form with independent contractors would be wise to take steps to enhance their compliance with independent contractor laws. By elevating their level of compliance, COVID-19 waivers and releases are more likely to be enforced and contractors will have far less grounds to assert that they have been misclassified.

Companies wishing to minimize their exposure to IC misclassification claims may wish to use a process such as IC Diagnostics™ to restructure, re-document, and re-implement their IC relationships in a manner that maximizes IC compliance. 

Another reason to enhance IC compliance is to avoid liability if a customer claims a contractor’s actions or inactions caused one or more of the customer’s employees to contract COVID-19. Unlike employees whose negligence can create liability for their employers, companies are generally not liable for the acts of independent contractors who have been properly classified as such.   

CONCLUSION

While COVID-19 waiver and release forms for independent contractors need to be artfully drafted to withstand strict scrutiny by the courts, there are compelling reasons to require contractors to sign them. But it remains to be seen whether courts will be receptive to enforcing COVID-19 waivers and whether states will pass laws affecting liability and waivers of liability for contracting the Coronavirus.   

Richard Reibstein is co-head of Locke Lord’s Independent Contractor Misclassification and Compliance practice and publishes the only blog dedicated to the subject, found at 
www.IndependentContractorCompliance.com. Janet Barsky is a senior counsel at Locke Lord; her practice focuses on independent contractor compliance. 

This QuickStudy is based on an article by Richard Reibstein and Janet Barsky that was published by Bloomberg Industry Group on July 21, 2020, entitled “Insight: Should Independent Contractors Sign Covid-19 Liability Waivers?“ Reproduced with permission from © 2020 The Bureau of National Affairs, Inc. (800-372-1033) www.bloombergindustry.com.