When it comes to commercial leases, gym tenants can often feel overwhelmed by the concepts and clauses found in the contracts presented to them. By simply knowing what to look for—and how to best position themselves when negotiating a commercial lease—gyms can establish a lease agreement that best suits the unique needs of their business. While it is always advantageous to have an attorney representing the gym’s interests throughout the contracting process, being aware of the following key points will help any gym during lease negotiations.

The Term of the Lease

One of the most important aspects of a commercial lease for gym owners negotiating their lease agreement is the term—or length—of the lease. While this may seem like an obvious point, the term of the lease can in fact be much shorter than explicitly stated in the agreement and there are various pitfalls to avoid.

A tactic some landlords utilize to their advantage is placing options within the contract, providing the ability to cut the term of the lease short of what the gym owner believes they are agreeing to—i.e., providing triggers or conditions to end the term early. The triggers may not be immediately apparent from the face of the lease and may not be confined to the section or page(s) of the lease detailing the term.

By way of example, a gym signs a contract to lease a property for ten years. The gym spends the first few months building out its walls, installing belay stations, creating a custom training center, putting up its signage, hiring a full staff, and establishing a steady clientele. But then, the landlord has a change of heart and informs the gym that it has six months to vacate the property. The gym remembers signing the ten-year lease and is confused, as it believed the gym would be using the property for a minimum of ten years. However, the gym overlooked that the lease contained an option to terminate the lease prior to the conclusion of the term provided the landlord gives six months’ notice of its intent to terminate (and thus evict the tenant). So, while the gym in our example believed it was signing a ten-year lease, in effect, it signed a six-month lease because of the termination option. Stated another way, the term is only as long as the earliest chance to end the lease. [This six-month example is somewhat hypothetical; it is not based on an actual known situation that occurred with a climbing gym. But it would not be out of the question for a gym operator to encounter a termination clause that required such short notice, and the authors are aware of similar circumstances to tenants in other industries.]

For any gym, it is important to know the true term of the lease and what options exist within the contract so as to not be blindsided in the event the lease is cut short. This is especially true for climbing gym owners given the nature of the business, most notably the sunk costs of building out the gym and investing in the property.

Unless the property contracted for was previously used as a climbing gym, a new gym owner is likely going to construct various fixtures to the property to facilitate its use as a climbing gym—e.g., climbing walls, padding. As all of you reading are aware, these fixtures are very expensive and, to fully recoup the costs of said fixtures, gym owners often expect to use them throughout the term of their lease and possibly further if they renew. But, if an option exists in the contract where the landlord can terminate the lease shorter than contracted for, a gym could be in a position where it has yet to make a profit due to the initial costs associated with furnishing the property to be a climbing gym.

These examples are meant to illustrate the potential issues that can surface if the true length of the lease is not fully understood, which is the crux of any commercial lease. For a gym in these hypotheticals, there could be some remedial options if a landlord indeed cut a lease short, but the best option is to simply avoid the situation entirely by knowing outright what the lease term is and how it can be altered. It’s much easier to negotiate the lease term on the front end as opposed to altering it once the landlord has started eviction proceedings.

Hidden Costs

Looking past the term, a gym also needs to understand if the lease has hidden or latent costs. For example, a lease may be a “gross lease,” which means that all costs are included. Alternatively, a lease may be a “net lease,” which means there are additional costs beyond the rent. Many commercial leases, unlike most residential leases, make the tenant responsible for maintenance and upkeep of common areas. 

A gym needs to get the details on these costs upfront and determine whether to negotiate any of these costs to fully understand its financial obligations under the lease. And, if the gym is responsible for maintenance of certain elements or systems of the property, the gym will want to review those elements and systems in advance to determine their condition before accepting the responsibility to maintain their upkeep.

If the lease contains separate costs, such as maintenance costs, the gym should try to negotiate dollar amount caps or negotiate for a slightly higher rent in exchange for the landlord assuming certain costs. These provisions are negotiable and can be leveraged to gain more favorable terms in other areas of the lease, as necessary.

Other Favorable Clauses

Finally, when negotiating a lease, a gym will want to consider what favorable clauses it needs, and those it wants. For example, a co-tenancy clause is common in commercial leasing and allows co-tenants to pay a reduced rent or cancel its lease if a key tenant, often called an “anchor tenant”, or a certain number of co-tenants leave the retail space. A co-tenancy clause will allow a gym to break a lease if the large tenant, perhaps one that drives business to the gym, leaves the retail space.

Likewise, it is possible for gyms to negotiate limitations with the landlord on the types of other businesses to which the landlord can lease neighboring property in the retail space, including a restriction that forbids the landlord from leasing neighboring property to a competitor, such as another climbing gym or fitness center.

On a related note, in order to ensure tenants rights are maintained in the event of a landlord change, a gym may want to consider adding a “survival clause” to a lease. Although most lease agreements include standard clauses stipulating that the agreement is binding on the landlord and all their assignees, survival clauses could provide greater protection in fleshing out this stipulation in greater detail.

Concerning the building itself, it is also possible for the gym to negotiate with the landlord to ensure that certain improvements are made prior to moving in, such as updates to the HVAC system or plumbing. Those details can (and should) be fully negotiated between the parties and impact the cost issues noted above.

Additionally, the gym will want to ensure that it is permitted to put up signage or related marketing materials, especially if the gym plans on installing physical signage or altering the physical structure.

While there are many additional lease terms to consider, and all written terms should be carefully vetted, these key considerations are some of the most important for gyms to evaluate when negotiating a commercial lease.

Renewal Process

Another aspect of the commercial leasing process tenants often feel unsure about is the renewal process. This aspect is especially important as gyms can find themselves fully established in their business but feel as though they have no leverage in negotiating the renewed lease. Unfortunately for those tenants, they will often agree to renewal terms clearly in favor of the landlord to ensure the continuation of the lease and thus their business.

A lease renewal can come with a litany of changes, but most common is the market rate adjustment for rent owed to the landlord during the renewed lease’s term. In almost every renewed lease, landlords will want to adjust the rate at which they are leasing the premises, as the market has likely adjusted since the formation of the original lease. While this is common, there are certain factors for tenants to keep in mind when the time comes to renew the lease and agree to new rental rates.

First, it should be noted that a market rate adjustment that truly adjusts based on comparable rates in the area—and the current market conditions—is not necessarily a bad thing. This is likely the fairest rate adjustment option for both sides because in a down market the rate would lower and in an up market the rate would increase. To contrast this, some commercial leases will have a set percentage increase if the tenant wishes to renew regardless of market conditions. While this may seem beneficial because a tenant will know in advance the exact rate they will have to pay if they renew, it can be detrimental to the tenant if the market is down and they are required to pay a higher rate than before. With that said, if the market booms and comparable properties are leasing for much higher rates than the set percentage, it could turn out to benefit the tenant as the set percentage could act as a cap of sorts. This shows that a set percentage rate increase can often be more of a gamble in unstable market conditions.

Second, gyms may have more leverage than they think in the renewal process. Finding new tenants for commercial property can be a long and expensive process. A landlord’s goal for their property is to continuously lease it out to create and maintain a revenue stream. With no tenant, the revenue is cut off for as long as it takes to fulfill the vacancy. Tenants can benefit from reminding landlords during the negotiation process of the costs associated with the potential downtime it takes to find a new tenant. Beyond this, given most gyms have constructed numerous fixtures to the property to make it a suitable climbing gym, even if the landlord has a new tenant in mind, there will inevitably be downtime or general costs for the removal of the fixtures assuming the next tenant doesn’t intend to use them. This reminder is not likely to completely flip the leverage in the gym’s favor, but making this information known to the landlord can only help the tenant during the renewal negotiation process.

These are just a handful of aspects to keep in mind during the negotiation of a commercial lease. Given the complexity and variety of each commercial lease, there can never be a concrete checklist for every gym to follow. However, having a better understanding of the process in general and knowing the areas of importance can be beneficial for any gym looking to ensure their commercial lease benefits their business rather than hinders it.

Note: This column offers general advice and is not intended to be used as direct legal counsel. Gym owners should consult a lawyer for their facility’s specific legal matters. Pill and Mosey can be contacted directly at the indicated links.

The post Commercial Leases: A Climbing Gym Owner’s Guide to Negotiation Tactics, Common Pitfalls, Legal Issues appeared first on Climbing Business Journal.

QUESTION: “How can climbing gyms keep up with rapidly changing laws that protect personal information?”

The rules that govern information privacy and security are changing quickly, and the risks of non-compliance—or worse, a data breach—are more severe than ever. Every climbing gym, no matter its size, handles and maintains some amount of personal information, and likely a good bit more than most gyms realize. As a result, every gym should review the personal information it handles. This includes the data it collects, maintains, stores, uses, shares and transfers. But where to begin?

Defining Personal Information

A good starting point is to define and classify “personal information,” so a gym knows what it needs to monitor and protect. Unfortunately, no uniform definition of “personal information” currently exists—it varies by situation and location. The majority of states have adopted definitions that capture the types of information that most of us would consider personal and confidential.

For example, many state laws define “personal information” as specific pieces of information, such as a name and driver’s license number, payment information, biometric data (e.g., fingerprints, facial scans), or a passport or Social Security number. Other state laws, however, define it in broader terms. For example, Virginia will soon define “personal information” as “any information that is linked or reasonably linkable to an identified or identifiable natural person,” once its new privacy law goes into effect. Virginia’s definition could potentially include something as simple as an email address.

Handling Personal Information

Correspondingly, the U.S. does not have a single, comprehensive law that governs how a company can (or should) handle or protect personal information. Instead, the country’s data privacy laws consist of a mosaic of individual state laws. These often protect residents of that state, and in some instances, provide industry-specific guidance (commonly found in regulated industries like finance and health care). Companies outside of these regulatory sectors, such as climbing gyms, must keep up with a growing body of state laws on the proper handling of personal information to avoid potential legal risks.

Take Alabama’s security breach notification law, for example. If a company handles certain personal information about Alabama residents, it must employ reasonable measures to protect the information against a security breach. These include considering naming an employee to oversee the company’s security measures and requiring service providers, through a contract, to also employ proper safeguards. If a company handles similar information about California residents, however, it may be subject to more burdensome legal duties under that state’s privacy law. California law grants its residents, among other things, the right to know what personal information a company handles about them and the ability to make sure the information is erased.

Personal Information in Gyms

All fifty states now have some rules on how their residents’ personal information can be handled. So each climbing gym is covered by at least one data privacy law applicable to either the location of the gym or the location of the individuals whose data the gym maintains (this is in addition to the risk of experiencing a data breach and the costly class action litigation that may follow).

At a minimum, all gyms have personal information relating to their employees (e.g., Social Security numbers, drivers’ licenses, banking information) and some amount of personal information on their members and guests. Depending on its point-of-sale (POS) system, a single gym can easily process and store hundreds or thousands of financial transactions, including credit card data and banking information. As a result, gyms must be mindful of the personal information they maintain and the corresponding data privacy laws or regulations applicable to them.

Taking an Information Inventory

Complicating compliance efforts, data privacy and security regulations vary and are added to often. That said, there are some best practices for all gyms to consider, no matter how large or small. A gym that handles personal information, whether from one or multiple states, should start by conducting an inventory of the information it handles to adapt to this shifting legal landscape. An information inventory detects:

• The personal information a gym collects
• Why and how the gym handles it
• Whom it is shared with and how that person is handling it
• How it is stored and deleted
• What security measures are employed throughout the information’s life cycle

Assessing Risks

Once the inventory is complete, the gym can find and assess the changing risks (legal, financial and reputational) associated with the personal information and respond. It can also find potential weaknesses in its data protection measures. For example, not all gyms may be aware of how their service providers process information. Maria Trysla, Business Leader of Rock Gym Pro (RGP)―which provides the most prevalent POS software in climbing gyms―says:

“The challenge is to stay current with the various laws and regulations regarding privacy [which] may differ across regions and/or countries. Whereas we find a common ground and apply security and privacy measures that address the concerns of these laws. As additional privacy laws are developed, we will adapt RGP to match the privacy requirements. Ultimately, the responsibility of protecting the customer’s data is the responsibility of the gym/facility.”

Responding to Risks

Additionally, while Rock Gym Pro and other companies will strive to comply with privacy requirements, it should not be taken as a given that every service provider will strive to do so. Gyms should ensure that, at a minimum, the service providers which process personal information on its behalf are required to:

• Only use the gym’s information for particular purposes
• Maintain certain safeguards when handling the gym’s information
• Timely notify the gym of a security incident

Even after addressing security vulnerabilities, a gym reliant on computer networks should also consider cyber insurance, which can cover costs of responding to and recovering from a cyber attack. Selecting cyber insurance coverage requires a gym to evaluate the privacy and security risks it faces, which an information inventory will help with. How much coverage a gym needs will depend on multiple factors, such as the volume and sensitivity of data being handled. If a gym decides to obtain such insurance, a specific cyber policy or addendum is likely needed, because most commercial general liability policies do not cover cyber incidents.

Free Resources for Gyms

Free resources are available to help a gym conduct an information inventory and bolster its security practices. The National Conference of State Legislatures provides a list of state security breach notification laws, available here, and other state laws related to digital privacy, available here. Not all relevant laws will be listed in these links, but they offer a place to start looking for potentially relevant legal obligations when handling personal information.

In addition, the National Institute for Standards and Technology (NIST) Framework for Improving Critical Infrastructure Cybersecurity Version 1.1 provides a cybersecurity framework on which any business can develop their cybersecurity program. The NIST Framework, available here, does not provide a single set of requirements, but rather, by following its process, enables a business to develop its own security protocols designed to meet its needs.

Information inventories are the baseline for assessing a gym’s data protection measures and privacy procedures. A gym should review and update its inventory on a regular basis and especially when its business operations change. Doing so helps a gym better handle personal information, prepare for a security incident, and address changing legal requirements. And, while these may not sound like pressing concerns to some gyms, the growing risk of civil fines and reputational harm for privacy non-compliance and the rising cost of data breach litigation show that data privacy is now critical for all companies. Climbing gyms, unfortunately, are not immune from these risks and must take proper precautions.

Note: This column offers general advice and is not intended to be used as direct legal counsel. Gym owners should consult a lawyer for their facility’s specific legal matters. Reda can be contacted directly here.

The post Ask a Lawyer: Why Data Privacy Matters for Gyms appeared first on Climbing Business Journal.

QUESTION: “I am a gym operator and I would like to start a scholarship program and/or discounted membership system to make climbing at our gym more accessible. What legal barriers should I consider first?”

PILL: Generally speaking, implementing a scholarship program has few legal risks, and of course, is a great way to increase access to climbing in your community. That said, there are some initial considerations a gym should evaluate to avoid unintended legal consequences.

When implementing a scholarship program, two primary considerations are (1) financial structure and (2) selection criteria for the program. How a gym tackles these issues will have a significant bearing on the attendant legal obligations and barriers.

Financial Structure

As a starting point, any gym will want to discuss the program with its accountant or in-house finance team to figure out how the scholarship program will be structured for tax purposes and, if necessary, how it will be funded. For example, will the gym set up a separate 501(c)(3) non-profit to fund the scholarship program? While this approach has significantly more administrative requirements with the formation and maintenance of the charitable entity, it allows the gym to seek outside donations or partnerships from members or other organizations, if the gym plans on expanding the program. Plus, the 501(c)(3) could be leveraged to support other aspects of your community beyond scholarships and could open the door to much community support on a wide spectrum of issues.

Creating a 501(c)(3) to fund the scholarship program also incentivizes external giving through certain tax breaks and can lend some legitimacy to the program because of the organizational formalities associated with running a charity. This format is well suited if the gym is looking to use external funds to offset the cost of the scholarships awarded (e.g., raising external amounts to fund a full membership for a climber with financial need).

Alternatively, a gym can internalize the program by simply reducing its membership price for scholarship-eligible individuals, which does not necessarily require an influx of cash and, instead, is similar to a discount program. This option does not easily allow for external donations (because it could look like self-dealing), but removes many of the formalities required of a 501(c)(3) and, as a result, reduces many legal barriers and administrative costs.

The structure of the program will impact how much funding is needed, if any, and a gym should consider these machinations in advance. It is much more difficult to switch accounting methods or donation treatments down the road, so initial planning can be quite valuable. And, of course, the foregoing options are not mutually exclusive, and the gym can explore combinations that involve discount programs and a 501(c)(3) charitable entity. Neither option is right or wrong, merely two approaches to consider…or combine.

Determining the Recipients

Looking past these initial organizational and formation issues, a gym will need to decide the mechanics of its scholarship program—and what it intends to offer, as this will directly impact the selection criteria and corresponding legal risks (e.g., discount program vs. full scholarship).

One option is for the gym to set a baseline for financial aid available to all climbers or families below that threshold (e.g., families who have an annual household income below a certain amount are eligible for a certain percentage reduction on all gym membership fees). The relevant financial threshold to qualify for the discount can be tied to local poverty or income statistics that better match the gym’s demographics and region. Moreover, this approach reduces administrative work and selection issues because the selection only involves validating application data to determine if the financial threshold is met. The ease of this approach and its ability to help several climbers or families makes it very attractive for many gyms.

As an alternative to financial aid for all who qualify, a gym can consider awarding larger scholarships or more limited scholarships for individuals selected from a pool of candidates, with the candidate receiving a free or heavily discounted membership. This may be a more generous option for the selected climber or family, but can create complications for other deserving families who do not receive aid. If the gym wants to consider such a selection process, it puts the gym in an unenviable position of determining who is “more worthy” of financial aid. Given all of the socioeconomic factors that can influence this decision, many gyms may decide to skip this option entirely.

Avoiding Traps

Perhaps most notably, though, if a gym implements a selection process whereby only certain candidates receive financial aid (to the exclusion of others seeking it), the gym will invite more scrutiny and legal oversight.

There are no specific rules for how a gym must compose its selection panel (e.g., one decision-maker or a committee), but there can be legal issues based on the results of the selection process. Of paramount concern, any gym selecting scholarship recipients must ensure that the selection process is free of any discrimination—actual or perceived. Virtually all climbing gyms are considered “public accommodations” under federal and state laws because they offer goods and services to the general public. As such, federal and state laws prohibit discrimination against designated groups, based on the premise that everyone is entitled to enjoy goods and services of public accommodations equally.

Through the Civil Rights Act of 1964 and the Americans with Disabilities Act, the federal government statutorily prohibits discrimination in public accommodations on the basis of race, religion, color, national origin, and disability. State laws often provide additional protections on other bases, including age, sex, and sexual orientation. This means that if a gym’s scholarship selection is carried out in a discriminatory manner, the gym could violate the laws generally applicable to public accommodations (or at least risk a lawsuit alleging such from a disgruntled candidate who did not get a scholarship).

On an individual basis, it would be very difficult for a rejected candidate to prove that the scholarship selection was carried out in a discriminatory manner. However, it could become more provable if the gym demonstrated a pattern over time of selecting certain applicants to the exclusion of others. For example, if numerous applicants with disabilities were passed over in favor of applicants without disabilities, that could present a situation of actual (or at least perceived) discrimination against climbers with disabilities. While still a difficult claim to prove—and one with modest damages—it is not the type of lawsuit a gym would want to face for cost reasons and the negative publicity that would ensue.

Finding Solutions

To avoid those risks, if a gym uses selection criteria that excludes otherwise qualified candidates, the gym should ensure that the criteria emphasizes objective components wherever possible. There will be no way to remove all subjective elements, but eliminating those considerations and focusing on objective criteria will better position the gym to evaluate applications and explain its rationale if ever challenged by a rejected candidate. Of course, these risks disappear if the gym sets baseline criteria for a discount available to all individuals or families who qualify, thus removing the selection element from its process.

As another alternative, a gym could consider instead partnering with and donating to an external organization which offers scholarships or grants to climbers. In this way, any selection process is determined by an entity that is not a place of public accommodation, which could provide more flexibility in offering climbing scholarships to certain underserved groups. This kind of partnership would resemble the offering of external diversity scholarships by universities or their departments as part of affirmative action practices.

Overall, the legal risks associated with implementing a scholarship or discount program are minimal and generally can be avoided with foresight and good planning. Increasing access to climbing is a great goal that should be encouraged, and the above commentary is not meant to discourage any gym from implementing such a program. Rather, the foregoing highlights some initial considerations that gyms should address at the beginning of the program to avoid future complications or unintended consequences.

Note: This column offers general advice and is not intended to be used as direct legal counsel. Gym owners should consult a lawyer for their facility’s specific legal matters. Pill can be contacted directly here.

The post Ask A Lawyer: the Legality of Scholarship Programs appeared first on Climbing Business Journal.

If you have a legal question that you’d like Pill to tackle about your gym in a future installment of Ask a Lawyer, you can submit it here.

QUESTION: “Can I require my employees to get a COVID-19 vaccine when it is available? What are the legal risks of doing so, and how should my gym prepare?”

PILL: Although healthcare and frontline workers are receiving priority for the COVID-19 vaccine, additional vaccines are being approved and hopefully will be available for the general public soon. In a rush to return to normal as soon as possible, most gyms likely will want to consider vaccine programs that will further minimize COVID-19 risks and create a safer gym for employees and climbers alike. However, public sentiment toward the vaccine is far from unanimous, and some gym workers may object to the vaccine for personal, medical, or political reasons. Below are some of the main questions to consider for your climbing gym.

Requiring employee vaccinations

Generally speaking, yes, and as explained below, gyms can bar employees from coming to work if they refuse.

No law or regulation directly addresses whether an employer can force its employees to get a COVID-19 vaccination, but the concept of mandatory vaccination programs is not a novel issue, as many healthcare workers are required to receive and maintain certain vaccinations as a condition of their employment. Most non-union companies, which includes virtually all climbing gyms, have wide latitude when crafting employee policies and procedures, including vaccination programs, because the employment relationship is presumed to be “at-will.” As a result, climbing gyms can terminate at-will employees or take them off the schedule for any legal reason, which could include the refusal to comply with a vaccine mandate.

Complicating the issue here, though, is the FDA’s sped-up procedure for authorizing vaccines in a public health emergency, which provides that individuals have the option to refuse vaccines under these circumstances. This is part of the trade-off for allowing the faster vaccine approval. So, if a gym terminates an employee for refusing to get a COVID-19 vaccination, this FDA provision could provide the employee with an argument that the firing was improper, especially in any of the 42 states that recognize a public policy exception to the at-will doctrine. The public policy exception covers situations where employees are terminated for acting in the public interest, refusing to violate a law, or otherwise exercising a statutory right.

The issue here largely would be whether employees have a statutory right to refuse the vaccine under the FDA’s approval procedures, but the law is unclear on this novel issue and clouded by the complex intersection of workplace laws and FDA approval guidance—two areas of law that rarely intersect. Ultimately, the issue will likely play out in courts across the country, but given the current lack of clarity, many employers are opting for voluntary vaccination programs as a safer option than implementing a vaccine mandate.

Employees objecting for medical reasons

Employees can object to getting vaccinated for medical reasons. In fact, there are certain exclusions to consider when implementing a vaccine program—and the most notable exclusion would be based on medical reasons. The Americans with Disabilities Act (ADA) would allow an employee to request an exemption from a vaccine mandate if the employee has a “disability,” as defined by the ADA. (For reference, not all medical conditions are covered under the ADA, which defines a “disability” as “a physical or mental impairment that substantially limits one or more ‘major life activities.’”)

If an employee requests to opt-out of a vaccination program for medical reasons, the climbing gym initially would have to determine if the employee’s condition is covered under the ADA’s definition of a “disability.” If so, the climbing gym then must determine whether allowing the employee to not get vaccinated would pose an “undue hardship” on the climbing gym, which is a term of art under the ADA and the subject of thousands of lawsuits. Given the unprecedented nature of COVID-19 and the corresponding vaccine, there is no case law or judicial analysis to inform the decision of whether employee vaccination opt-out request will pose an “undue hardship.”

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Employees objecting for religious reasons

Title VII, which prohibits discrimination on the basis of religion, gives employees the right to seek an exception from a vaccination mandate based on sincerely held religious beliefs. As explained by the Equal Employment Opportunity Commission (EEOC), which enforces federal laws against job discrimination, religion for the purposes of federal anti-discrimination law covers strongly and sincerely held moral or ethical beliefs, and may be a little broader than many people consider the term “religion.”

Climbing gyms can deny religious accommodations if they create an “undue burden.” Notably, though, this standard is easier for climbing gyms to satisfy than the ADA’s “undue hardship” standard. When evaluating religious accommodations, the law requires the employer to honor the accommodation, unless doing so would cause more than a “minimal burden on the operations of the employer’s business.”

Handling medical or religious exceptions

The EEOC recently issued guidance on the issue of mandatory vaccines and employees who are unable to get vaccinated. Specifically, the EEOC advised that an employer can exclude an employee from the workplace if: (1) the employee cannot get a COVID-19 vaccine because of a disability or religious reason and the employer conducts an individualized assessment that determines the employee poses a “direct threat” to the health or safety of others in the workplace; or (2) the employee cannot get a COVID-19 vaccine because of a disability or religious reason, and there is no reasonable accommodation possible (e.g., social distancing, industrial measures).

While it would be lawful for the employer to exclude the employee from the workplace under these scenarios, it does not mean that the employer may automatically terminate the employee if a medical or religious request cannot be accommodated.

Offering stipends and benefits

As a gym owner/manager, you can offer stipends or benefits to induce employees to get vaccinated as an alternative to a vaccination mandate. To phrase it another way, if you prefer to use the proverbial carrot instead of the stick, you can offer benefits to employees who receive the vaccine. This might include tangible benefits like gift cards, or other incentives like additional vacation time or paying employees for time spent getting the vaccine. Also, consider whether you may want to afford employees additional time off after getting the vaccine (e.g., taking off the rest of the day). Early reports suggest that the COVID-19 vaccine may be more painful than a regular flu shot and could be accompanied by short-term side effects, such as flu-like symptoms or headache, that could cause employees to miss work.

Whatever approach your gym takes, plan ahead and set aside administrative resources. Most of the leading COVID-19 vaccines, including those by Moderna and Pfizer, require two separate shots to be taken several weeks apart. If you are requiring vaccines or simply incentivizing them, you will want to track these details because some employees may get the first shot and forget to get the second—or mistakenly take a first shot of one vaccine, but then get the second shot from another vaccine. Some initial planning could help avoid some of these issues and expedite the process for the climbing gym.

While the vaccine will not be generally available for individuals until later in 2021, climbing gyms should start the planning process now and consider what approach, if any, they intend to take. Climbing gyms should consider the risks of a mandatary vaccination program and whether alternatives, such as voluntary vaccinations with or without incentives, can also be effective in maintaining a safe workplace.

Note: This column offers general advice and is not intended to be used as direct legal counsel. Gym owners should consult a lawyer for their facility’s specific legal matters. Pill can be contacted directly here.

The post Ask a Lawyer: Can Gyms Require Vaccination? appeared first on Climbing Business Journal.

If you have a legal question that you’d like Pill to tackle about your gym in a future installment of Ask a Lawyer, you can submit it here.

QUESTION: “My climbing center is located in California and is currently open. Do the new COVID standards for employers impact me? If so, what do they require I do?”

PILL: In late November, California’s Department of Industrial Relations’ Occupational Safety and Health Standards Board adopted emergency temporary standards to protect workers from hazards related to COVID-19. Shortly thereafter, the Office of Administrative Law (OAL) approved the emergency standards, and the standards became effective on November 30, 2020. Notably, the new standards apply to all employees and all places of employment, unless employees are working from home, or unless there is only one employee who does not have contact with other persons—this effectively includes all climbing gyms still operating within the state.

The as-proposed emergency standards are available here. The primary component of the standard is section 3205, which is modeled after the Injury and Illness Prevention Program required of all California employers and requires a written plan that addresses hazard identification, evaluation and correction; investigation; training; physical distancing, face coverings, and other engineering and administrative controls; reporting and recordkeeping; and return to work criteria.

A Long—But Important—List

More specifically, the required program for businesses must contain or address the following aspects:

Communication: Contain a system for communication, including a form that details employee reporting mechanisms, procedures or policies for accommodating employees with medical or other conditions that put them at increased risk of severe COVID-19 illness, provides information about access to testing, and communicates information about COVID-19 hazards and the employee’s policies and procedures; Contain a system for identification and evaluation of COVID-19 hazards, including that employers must evaluate all interactions, areas, activities, equipment etc. that could potentially expose employees, screens employees for COVID-19, and includes policies for immediately addressing COVID-19 cases at work to prevent or reduce transmission;

Air Flow and Filtration: Evaluate how to maximize the quantity of outdoor air and whether it is possible to increase filtration efficiency; Include a process for conducting periodic inspections to identify unhealthy conditions, work practices, and work procedures related to COVID-19 and to ensure compliance with the company’s COVID-19 policies and procedures;

Contact Tracing: Contain an effective procedure to investigate COVID-19 cases in the workplace, including verifying case status, receiving information regarding test results, onset of symptoms, and identifying and recording COVID-19 cases; When there has been a COVID-19 case at the place of employment, the employer must determine the date/time the case was last present, the date of the positive test, and the date of the first symptom and evaluate the situation to determine who had a COVID-19 exposure. Employers must provide notice of a potential COVID-19 exposure to exposed employees within one business day in a way that does not reveal personal identifying information;

Testing and Training: Employers must offer COVID-19 testing at no cost to employees during their work hours to all employees who had a potential COVID-19 exposure in the workplace and provide certain information and benefits; Investigate whether any workplace conditions could have contributed to the risk of COVID-19 exposure and what could be done to reduce exposure to COVID-19 hazards;

Employers must implement effective policies to correct unsafe or unhealthy conditions in a timely manner; Employers must provide effective training and instruction to employees that includes the employer’s COVID-19 policies, information regarding COVID-19 benefits to which employees may be entitled under applicable, federal, state or local laws or the employer’s own leave policies, the fact that COVID-19 is an infectious disease, the methods for transmission, importance of recognizing COVID-19 symptoms and staying home when sick, physical distancing, face coverings, hand hygiene, and other controls that that help reduce the spread of COVID-19 given that particles containing the virus can travel more than six feet, especially indoors;

Distancing and Masks: Employers must separate employees from other persons by at least six feet (except for momentary exposure while people are in movement) unless an employer can demonstrate that is not possible;

Employers shall provide face coverings and ensure they are worn by employees indoors and outdoors when employees are less than six feet away, subject to certain exceptions. Employers must implement measures to communicate the face covering requirement to non-employees and must develop policies to minimize employee exposure to COVID-19 hazards originating from persons not wearing a face covering, including a member of the public;

Where physical distancing isn’t possible, employers shall install cleanable solid partitions that reduce aerosol transmission between the employee and other persons;

Cleaning, Handwashing, PPE: Employers shall implement cleaning and disinfecting procedures and inform employees of such cleaning protocols including the frequency and scope. Employers shall prohibit sharing of PPE and other items with which employees regularly come into contact;

Employers must evaluate handwashing facilities, determine whether additional facilities are needed, and provide employees with hand sanitizer and time to hand-wash; Evaluate the need for PPE and respiratory protection (when physical distancing cannot be maintained);

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Reporting: Employers are required to report COVID-19 cases at the workplace as required by law and must report any COVID-19 related serious illness or death of an employee occurring in a place of employment or in connection with any employment; The order also requires employers to keep record of COVID-19 cases and maintain all information confidentially. Testing and other services must be provided in a way that ensures confidentiality of employees.

Positive Cases: Employers must exclude COVID-19 cases from the workplace until 24 hours have passed since a fever of 100.4 or higher, COVID-19 symptoms have improved, and 10 days have passed since the onset of symptoms. Furthermore, employers must exclude employees with COVID-19 exposure from the workplace for 14 days following exposure. Employers shall continue and maintain an employee’s earnings, seniority, and all other earnings if employees are otherwise able and available to work. This does not apply to periods of time during which the employee is unable to work for reasons other than protecting persons at the workplace from possible COVID-19 nor does it apply where the employer demonstrates the COVID-19 exposure is not work-related.

The Necessity of Availability

It’s important to note that the written program required by the aforementioned standards must be made available at the workplace to employees, authorized representatives, and to certain California state agencies immediately upon request. The standards also set forth additional requirements if a workplace is identified by a local health department as the location of a COVID-19 outbreak (meaning, three or more cases in a 14-day period) or a major COVID-19 outbreak (20 or more cases in a 30-day period).

The emergency standards will remain in effect for 180 days unless the OAL approves a readoption of the standards during that time period. From there, the temporary standards can become permanent if the Board submits them through the regular rulemaking process.

Recognizing that most businesses would not have a written COVID-19 prevention plan in place by November 30, 2020, California intends to take a business’s good faith efforts into account and to offer “a little bit of flexibility” when evaluating compliance with the new standards. Nonetheless, businesses should expect that the State will issue citations based on non-compliance with the new standards and should not rely on “flexibility” in enforcement.

Note: This column offers general advice and is not intended to be used as direct legal counsel. Gym owners should consult a lawyer for their facility’s specific legal matters. Pill can be contacted directly here.

The post Ask a Lawyer: New COVID Standards for California Gyms appeared first on Climbing Business Journal.

QUESTION: “What are the consequences for climbing gyms that choose to remain open despite local health regulations?”

PILL: The stories of businesses staying open despite COVID-19 closure orders are increasing and have even included a few climbing gyms. Unfortunately, any climbing gyms that defy local closure orders likely feel as though they have no other choice but to stay open or risk permanent closure (assuming they are not staying open purely to make a political statement). While the necessity of staying open to avoid permanent closure indeed is sympathetic, it is not likely going to hold up, and climbing gyms that flout closure orders risk some serious consequences.

Legal Consequences

As a starting point, consider that most state and local closure orders contain penalties for non-compliance (and, in some instances, heightened penalties if the violation was knowing or reckless, as opposed to negligent). For example, some of the orders issued by Governor Gavin Newsom in California state that violations of the order start as a misdemeanor but increase to a fine of up to $1,000, imprisonment for six months, or both, for anyone who “refuses or willfully neglects” to obey a closure order. Additionally, Governor Newsom has hinted that businesses that operate in violation of closure orders could face regulatory or licensing enforcement issues.

But, California is not alone. On the other side of the country, Florida—which few would say has taken a similar approach to COVID-19 as California—has similarly instituted stiff penalties for non-compliance with closure orders. Violations of Florida Governor Ron DeSantis’ closure orders are treated as second-degree misdemeanors punishable by imprisonment, and Florida has utilized law enforcement officers and inspectors from the Department of Business and Professional Regulation to monitor businesses for compliance.

Demonstrating this concern, a fitness gym in Arizona recently was closed down for violating an executive order to close issued by the governor of that state. The Arizona Department of Health Services closed down the gym and ordered the gym to remain closed “until it is granted permission to reopen.” The gym was fined for non-compliance, and risks legal action, including the imposition of civil and criminal penalties, if it continues to violate the governor’s order. It is unclear when the Arizona Department of Health Services will allow the gym to reopen.

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Insurance Risks

State and local penalties and fines represent the most direct threat for climbing gyms that defy closure orders, but the analysis does not end there. Perhaps the greatest concern is the risk of losing or compromising the climbing gym’s insurance coverage. Many commercial general liability insurance policies contain a criminal acts exclusion, excluding from coverage liability arising out of certain criminal acts, which likely would include violation of a government closure order with a criminal penalty. Likewise, most commercial general liability policies require compliance with local laws or ordinances as a condition of coverage following a loss.

So what does that all mean? It means that a climbing gym operating in violation of closure orders risks losing its insurance coverage completely—which could be catastrophic should an incident or injury occur while the climbing gym is defying closure orders. As commercial insurance coverage forms vary across policies and jurisdictions, an insured climbing gym should consider consulting with its insurance agent before proceeding with a reopening plan in a jurisdiction with restrictions in place to ensure that the climbing gym does not compromise any of its insurance coverage.

Workers’ Comp Issues

Along those lines, climbing gyms may also experience workers’ compensation issues if an employee gets hurt while working during a period of time when the climbing gym legally should have been closed—especially if that employee contracts COVID-19. A climbing gym would lose virtually all legal arguments under workers’ compensation law and generally liability laws if an employee contracted COVID-19 during a period of time when an order mandated the gym to close to avoid the spread of COVID-19. Even in a situation not involving COVID-19 (e.g., an employee injures their foot while cleaning holds), the climbing gym would still encounter significant hurdles to defending itself in any workers’ compensation proceeding or lawsuit if the climbing gym was operating in violation of a closure order and should not have been open in the first place. And, any damages in a workers’ compensation proceeding or lawsuit would far exceed the potential penalties or fines associated with most closure orders, not to mention the bad press that would probably follow.

Presumably, most climbing gyms that decide to defy government closure orders likely feel as though they have no choice but to do so. Assuming the climbing gym will go out of business if it cannot stay open and generate revenue, some owners may be tempted to “take their chances” by staying open. However, there are many legal risks and complications with this approach, and the risks identified above are not an exhaustive list. Additional issues may be present with climbing gyms’ licensing requirements, bank or loan covenants, or employees who refuse to come to work during a closure…just to name a few. Instead of defying closure orders, climbing gyms should explore all other options to generate revenue, identifying lending sources, or restructure their debts. In the opinion of this attorney, the risk of being in bankruptcy is better than the risk of being in jail.

Note: This column offers general advice and is not intended to be used as direct legal counsel. Gym owners should consult a lawyer for their facility’s specific legal matters. Pill can be contacted directly here.

The post Ask A Lawyer: Consequences for Gyms That Stay Open appeared first on Climbing Business Journal.

QUESTION: As a gym owner and manager, I am wondering whether the ongoing COVID-19 pandemic changes the hiring process at all. Specifically, are there any issues or concerns that I should be addressing with potential hires (such as during the interview process) that I would not have addressed, say, six months ago or so?

PILL: Like many things during this period, COVID-19 has changed hiring for companies as well. Most commentary on this issue has focused on the evolving labor market and how job seekers may change their preferences—perhaps eschewing pricey (and cramped) cosmopolitan living in favor of less expensive (and more spacious) living in smaller cities. Such articles, though, presuppose that workers can perform their job remotely and, thus, can choose where they want to be located while they’re working.

For climbing gyms, that luxury usually does not exist, as very few workers can perform their job duties remotely—and the overwhelming majority of workers need to be physically present at the gym to perform their job (e.g., front desk staff, belay instructors/monitors, routesetters). So, while most climbing gyms aren’t expecting to see a variance in their applicant pool or workforce composition, COVID-19 still has had a significant impact on hiring. The logistics of the hiring process have changed, and new considerations present themselves, while many old issues remain, but are easy to overlook.

The Process for Conducting Interviews Has Changed.

The most prominent change for climbing gyms is that the majority of interviews are transitioning to a remote process (i.e., Zoom and Skype) that facilitates social distancing. Obviously, remote interviews can save some time and streamline the process, but remote interviews might not be ideal for all interviews, especially those requiring demonstration of a specific skill (such as tying knots, belaying, etc.) or for more critical roles within the gym.

A common pitfall with remote interviews—and also with remote work, for that matter—is the assumption that legal obligations or company policies are lessened because of the more casual format. Gyms must remember that hiring formalities—and all the accompanying legal obligations—apply with equal force whether the interview is conducted in-person, over the telephone, through text messages, via Zoom, and so forth. This is critical because job applicants, even those who you do not select, can bring a lawsuit against the gym. Litigation is not confined to current and former employees.

The logistics, though, are not the only element of hiring that has changed. COVID-19 considerations now permeate gyms’ daily, if not hourly, decision–making process, and may have a role during hiring. However, certain interview questions can be problematic and potentially expose a gym to legal risks, even if asked with the best of intentions.

Can I Ask COVID-19-Related Questions During an Interview?

The short answer: Yes, but at your own peril. Generally speaking, gyms face numerous restrictions on obtaining information about applicants during the pre-employment process. When dealing with COVID-19 during an interview, the most likely areas of concern would be questions that run afoul of the Americans with Disabilities Act (ADA) or the Occupational Safety and Health Act (OSHA) by soliciting improper information that suggests ulterior motives.

In terms of the ADA, improper questions would include questions that solicit information about an applicant’s disability, actual or perceived, and whether that disability may impact the applicant’s ability to perform the job (because the ADA provides coverage for “perceived disabilities,” gyms must be especially cautious about assuming that an applicant has a disability based on information from the applicant’s resume or some visual cue). If not asked correctly, questions that implicate an applicant’s disability can appear to be a nefarious tool used to filter out applicants with a disability. This clearly would violate the ADA, which is why discussions about disabilities should generally be avoided to prevent any confusion between the gym and the applicant. Improper questions include:

• Are you disabled?
• What is the nature of your disability?
• Are you taking any prescriptions?
• Have you filed any workers’ compensation claims?

A proper question, instead, would be to ask if the applicant is able to perform the essential functions of the job. The applicant’s response may be very similar, and perhaps identical, to the response that would be given to some of the improper questions identified above, but the focus is on the essential functions of the job—and the gym is not soliciting information about the applicant’s disability. There is a difference between information that a gym solicits and information that an applicant volunteers without prompting.

More specific to COVID-19, some gyms may be tempted to ask applicants about their willingness to work under certain safety conditions in the gym, based on the reality that the gym cannot eradicate all risks of contracting COVID-19. While most safety standards issued by state and federal agencies are permissive guidance, as opposed to mandatory requirements for gyms, asking about safety issues can be dicey because certain questions could make it appear as though the gym is trying to screen out potential whistleblowers or otherwise skirt its obligations to provide its employees with a workplace free of serious recognized hazards. Safety concerns certainly are not an unlawful topic, per se, but an area that warrants caution given the numerous rights that employees have under OSHA and the National Labor Relations Act (which protects employees who engage in concerted activities regarding workplace conditions—e.g., complaining about an unsafe work environment).

Additionally, in March, Congress passed the Families First Coronavirus Response Act (FFCRA). Among other things, the FFCRA provides paid leave benefits for employees who contract COVID-19 and employees who need to stay home to care for a child whose daycare or school is closed to COVID-19. As part of the FFCRA, companies cannot retaliate against employees who may seek these paid leave benefits. That protection from retaliation extends to job applicants, so gyms will need to avoid any questions that could come off as the gym’s attempt to determine whether the applicant would need FFCRA leave; this is because a denied applicant could allege that the gym did not hire him or her once the gym learned that the applicant may be eligible for FFCRA benefits, all in an effort to avoid the gym’s FFCRA obligations to provide paid leave.

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What Best Practices Should I Consider During Interviews?

Generally, focus on the necessary qualifications and let the job requirements guide the interview. I’ve mentioned a number of questions to avoid, which may leave some gyms wondering what questions are acceptable to ask. To stay out of murky legal waters, gyms should ensure that information obtained and requested through the pre-employment process, including job applications and interviews, is limited to the information essential for determining an applicant’s qualifications for the position. It may sound like an obvious point, but the questions need to be geared towards an applicant’s ability to perform the essential functions of the job.

A number of pre-employment inquiries can expose a gym to liability if not conducted properly or for business-related reasons (e.g., improper questions that suggest a discriminatory motive is being used to filter candidates—such as a reluctance to hire older workers based on an assumption that older workers cannot keep up with modern technology or avoid workers of certain faiths because of potential scheduling complications). Questions asking about the applicant’s personal life, medical history, age, faith, etc., often have no benefit to the job hiring process, and can improperly lead an applicant to believe those criteria are being used to select an applicant for the open position. Gyms can decline applicants for a good reason or a bad reason—it just cannot be a discriminatory reason.

That said, the focus of the interview should be the job requirements and necessary qualifications, skills and characteristics, and the job description often will serve as a helpful roadmap. Gyms should try to standardize the interview to avoid excessive latitude that could veer toward unlawful questions, and focus on objective and job-related information only. As noted above, instead of asking whether an applicant has any disabilities that would compromise his or her ability to perform the job, show the applicant the job description and ask whether he or she would be able to perform the essential job functions, with or without a reasonable accommodation. This may seem like a small change, but it alters the optics of the situation and prevents a gym from being in a position where it appears to be soliciting protected information that could be used for discriminatory purposes. Small tweaks like that can go a long way during the hiring process to better insulate gyms for legal exposure.

Along those lines, whether conducting an in-person or virtual interview, the gym should only make notes of job-related information. Notes from an interview can become evidence in a lawsuit one day if an applicant challenges a hiring decision and brings a lawsuit. So, if you are taking notes, make sure you would be comfortable with producing them in discovery one day to the applicant-turned-plaintiff. If you aren’t comfortable, don’t take notes.

The legal standards applicable to hiring do not change during a pandemic, but it’s all too easy to overlook these obligations when conducting a remote interview (perhaps from your own living room) or trying to navigate these unprecedented COVID-19 issues. As gyms continue reopening, they inevitably will bring back laid off employees and slowly begin hiring new ones. COVID-19 has changed the hiring process in many ways, but the legal obligations remain the same, and in fact, are heightened in some instances. Remain vigilant and don’t be tempted to treat Zoom interviews as something less formal or otherwise lacking all of the usual legal obligations.

Best of luck to all gyms reopening and bringing back staff.

Note: This column offers general advice and is not intended to be used as direct legal counsel. Gym owners should consult a lawyer for their facility’s specific legal matters. Pill can be contacted directly here.

The post Ask a Lawyer: Hiring in the Age of COVID appeared first on Climbing Business Journal.

QUESTION: “As a gym owner, do I have to worry about an employee suing me (or filing for workers’ comp) for allegedly catching COVID-19 at the gym?”

PILL: Absolutely—there is no way around these risks.

In addition to the risk of lawsuits brought by your customers (see the cruise lines, for example), your gym also must worry about claims by your employees as they return to work after weeks of government-mandated lockdowns. Lawsuits already are being filed against employers related to COVID-19 and the number of claims is expected to rise significantly in the coming months. Unfortunately, climbing gyms will not be immune from these legal risks.

Public health officials have warned that employees returning to work will likely increase their risk of exposure to COVID-19, and it’s anticipated that some employees who become infected with COVID-19 after returning to work will ultimately blame their employer (including gyms) for contracting the virus. At that point, regardless of the merits, an employee can file a workers’ comp claim or lawsuit against the employer seeking redress, the merits of which will then be litigated (at further expense to the employer). Although these claims seem imminent, employees will find it difficult to hold an employer accountable for COVID-19-related illness or death.

Proving It

One of the big questions related to all this is: “How do you even prove when or where someone contracted COVID-19?”

It is a good question without a good answer. Sick employees will struggle to prove that they contracted COVID-19 at the climbing gym because COVID-19 is a highly contagious virus and common in society, making it hard for an employee to prove that exposure to the disease was an inherent aspect of the employee’s job or that the disease was contracted while at the gym. Even with a confirmed COVID-19 diagnosis and anecdotal evidence of fellow employees contracting the disease, employees will face significant challenges to establishing causation because many details about COVID-19 remain unknown, especially its incubation period. Similarly, because COVID-19 is highly contagious, it may be challenging to prove that the disease was contracted during employment at the gym, as opposed to any other interaction outside the gym (or even while recreationally climbing at the gym when not working). Whether the issue is being litigated through the workers’ compensation system or court system, causation likely will be the biggest hurdle for employees. In many instances, it will be an insurmountable hurdle.

Even if causation is an issue for an employee, it may not stop him or her from bringing a lawsuit or workers’ comp claim against the gym.

Differences Between Lawsuits and Workers’ Comp Claims

Claims against gyms alleging that an employee contracted COVID-19 at the gym will most likely go through the workers’ compensation system. In most states, workers’ compensation serves as the exclusive remedy for any work-related injuries and illnesses, which often is beneficial for the gym in terms of limiting exposure and litigation costs. In Florida, for instance, workers’ compensation is the sole remedy for occupational diseases—meaning that an employee is barred from filing a lawsuit—and an employee may only receive worker’s compensation if he or she shows that the risk of contracting the disease is inherent in his or her employment and that he or she contracted the disease at work. Each state also has damages caps that apply to workers’ compensation claims, which are much more limiting than the damages available to a plaintiff who files a negligence claim.

Given the proliferation of workers’ compensation claims already being seen around the country, several state workers’ compensation boards have already considered and denied workers’ compensation claims based on contracting COVID-19 because of a lack of conclusive proof connecting the illness to the employment. Some states, like New York, however, have considered amending workers’ compensation statutes and regulations to make it easier for employees to prove that they contracted COVID-19 while at work. And in other states, like California, governors have issued executive orders easing the employees’ burden of proving that they contracted COVID-19 while at work and in the course of their employment. Notably, workers’ compensation is handled on a state level, and each state will have its own regulations and nuances.

An Exception to the Rule

Although workers’ compensation provides employees with the sole remedy for work-related injuries and illnesses, most states have an exception to this rule when the employer has deliberately harmed the employee or, in some states, acted grossly negligent. Because workers’ compensation claims usually cap damages based on an employee’s wages, many employees will attempt to avoid the workers’ compensation system under this exception and file a civil suit in court to request greater damages and hope to obtain a trial in front of a jury, which could be sympathetic toward a sick employee having to sue his or her former employer.

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For example, Walmart recently was named as a defendant in a wrongful death lawsuit brought by the family of a former employee who died of complications related to COVID-19. The lawsuit is attempting to get around the limitations of the workers’ compensation system—and damages caps—by alleging that Walmart engaged in intentional conduct by not protecting its employees. Walmart is expected to seek dismissal of the lawsuit by arguing that the issue should be resolved through the workers’ compensation system. Similar to Walmart, most gyms likely would prefer that workers’ COVID-19 claims proceed through the workers’ compensation system.

The Importance of Intent

Generally speaking, an employee can file a COVID-19 claim in court and circumvent the workers’ compensation system only if he or she proves that:

1. The gym deliberately intended to injure the employee, or
2. The gym engaged in conduct that the gym knew was virtually certain to result in injury or death to the employee, the employee was not aware of the risk because the danger was not apparent, and the gym deliberately concealed or misrepresented the danger so as to prevent the employee from exercising informed judgment about whether to perform the work.

Under this standard, employees most likely cannot file a suit for contracting COVID-19 when returning to the gym because the employee will probably lack proof that the gym desired that the employee would contract COVID-19.

Likewise, because many who contract COVID-19 exhibit no symptoms or recover without any significant medical complications, employees will face an uphill battle in proving that the gym was “virtually certain” that the employee would get injured or die from contracting the virus.

Finally, the ubiquitous media coverage on COVID-19 will make it difficult to prove that the employee was unaware of the health risks associated with COVID-19.

Steps a Gym Can Take

Despite the challenges in holding gyms legally accountable for COVID-19 illnesses, many employee lawsuits have already been filed, and more are anticipated as employers reopen their businesses. Amid these uncertainties and anticipated lawsuits, gyms should stay informed on the constantly updated CDC and OSHA guidelines that apply to them, including, where applicable, guidelines for fitness centers.

As of now, OSHA has issued many industry-specific reopening guidelines, but nothing yet for fitness centers or gyms (for reference, the guidelines for reopening retail establishments, found here, likely are the most applicable to gyms). Many states, however, have issued gym-specific guidelines for reopening within that state, and these guidelines cannot be ignored. Additionally, the Climbing Wall Association recently released a guide for climbing gyms’ reopenings.

Following relevant guidelines will help gyms demonstrate that they took necessary steps to protect employees from the virus. Gyms also should document all of these practices, including the dates on which they were implemented, to help limit their potential liability from employees (and customers). Even in states that require an employee to prove gross negligence to bypass the workers’ compensation system (a lower standard), employees and their family will find it difficult to prove that gyms were negligent if they followed the applicable guidelines and implement reasonable safety measures.

Note: This column offers general advice and is not intended to be used as direct legal counsel. Gym owners should consult a lawyer for their facility’s specific legal matters. Pill can be contacted directly here.

The post Ask A Lawyer: COVID-19 and Liability appeared first on Climbing Business Journal.

Every year, climbing gyms battle the flu. They strategically position free sanitizer stations around the facility and keep soap dispensers fully stocked. No matter the steps taken, however, we still hear customers coughing, sniffing, and sneezing. How can a climbing gym respond to sick customers they would prefer to not be in the building?

With the spread of coronavirus (COVID-19), climbing gyms may find themselves needing to communicate with patrons that are exhibiting obvious symptoms of illness. Before talking with a customer who “looks sick,” it’s vital to understand the laws around the issue. Locally, there may be statutes that limit your ability to exclude patrons. Nationally, there are two major issues to keep in mind, and CBJ contributor Jason Pill explores these below.

QUESTION: “Can my gym kick out a climber who looks sick?”

PILL: This situation is very nuanced. First, Title VII of the Civil Rights Act (a federal statute) prohibits discrimination in places of public accommodation on the basis of race, color, religion, and national origin. This includes virtually every climbing gym. Second, the Americans with Disabilities Act (the “ADA”) guarantees the right of public accommodation to disabled individuals, and thus prohibits discrimination by private businesses based on disability (e.g., a business cannot deny service to blind or deaf customers).

A Closer Look at the ADA

Refusing services to customers “who look sick” may run afoul of the ADA, but the inquiry doesn’t end there. As a starting point, having coronavirus, for example, may not qualify as a disability under the ADA because the ADA does not cover minor or temporary conditions (such as the cold or flu). The ADA does, though, cover severe short-term illnesses. It’s not a bright-line rule, so it depends how the illness impacts the individual and whether it actually is coronavirus or the flu. Adding further complication, and unlike Title VII, the ADA is broader than some of its federal counterparts and protects individuals who have disabilities or are perceived as having a disability.

Assuming an individual with the coronavirus is covered by the ADA and the ADA protections are triggered, the ADA still allows businesses to take safety factors into consideration when providing (or not providing) services. For that reason, there would be a strong public safety argument for denying service if an individual who is sick poses a direct threat to the health and safety of others. Of course, any safety standard relied upon by a gym would have to be based on objective criteria rather than stereotypes or generalities.

Communication vs. Exclusion

At a minimum, I think most gyms are safe putting up signs which encourage people who are currently sick or exhibiting flu-like symptoms to not visit, for the safety of others.  However, if gyms are going to actively refuse service, there are more nuanced considerations. Protecting the safety and health of other customers would likely insulate most gyms from liability in this situation, but I would be cautious about how a gym rolled out or implemented this program and how it determined when someone “looks sick.”

As a middle ground, I also think most gyms are safe talking to people exhibiting noticeable symptoms, and encouraging them to come back when they’re feeling better. This is a little softer than actively kicking them out, and may encourage a dialogue which could help ensure that the symptoms aren’t related to a different disability that was not contagious.  This is where messaging may help, and I would want to have a manager involved.

Note: This recurring column offers general advice and is not intended to be used as direct legal counsel. Gym owners should consult a lawyer for their facility’s specific legal matters. Pill can be contacted directly here.

The post Ask a Lawyer: Can Gyms Ask Sick Customers to Leave? appeared first on Climbing Business Journal.

QUESTION: “Most of the people on staff at my gym are hourly employees, so what do I need to know about overtime pay…and do I need to keep any records?”

PILL: While paying your employees for all hours worked seems like a straightforward concept, wage and hour lawsuits are some of the most frequently filed lawsuits across the country and many employers—including Fortune 100 companies—struggle with wage and hour compliance. That said, there are a few baseline concepts that every gym should know when it comes to paying hourly employees.

There Are National Standards

As a starting point, the Fair Labor Standards Act (“FLSA”) is the federal law that establishes a minimum wage, premium pay for overtime hours of non-supervisory employees, and protections for children who work. The FLSA applies in all states and to virtually every climbing gym. In addition to the FLSA, state pay laws also apply to employee pay. While most state laws parallel the FLSA with little distinction, some states provide much greater employee benefits and result in increased obligations upon the employer. California is perhaps the most notable example of a state that offers far greater employee benefits than the FLSA requires, and many other states require a minimum wage higher than the federal minimum of $7.25 (here’s an interactive map from the DOL tracking state minimum wage). Put simply, the FLSA is the floor and states can go up from there.

At its core, the FLSA requires employers to pay hourly employees a minimum wage for all hours worked plus overtime pay for hours worked in excess of 40 in a work week of at least one and one-half times their regular rates of pay (e.g., an employee who earns $10/hour and works 50 hours one week is entitled to receive 40 hours at $10/hour and 10 hours at $15/hour). Part of this analysis is the threshold issue of determining whether an employee is actually working or otherwise engaging in compensable time under the FLSA. For example, time spent commuting to work is not compensable. However, if an employee starts the day at one gym and then is directed to finish his or her shift at another gym, this time spent driving between gyms is compensable under the “all in a day’s work” concept.

Common Mistakes to Avoid

Problems arise when an employer fails to recognize and count certain hours worked as compensable hours. For instance, an employee who remains at the front desk while eating lunch and regularly meets with customers is working, even though the employer may consider this the employee’s “lunch break.” This time must be counted and paid as compensable hours worked because the employee has not been completely relieved of duty and is providing a benefit to the employer—i.e., greeting customers. Likewise, a gym must pay an employee even if the time spent working was not authorized (e.g., unapproved overtime). The gym can discipline the employee for not following the gym’s time-keeping policies, but still must pay the employee for the time spent working.

Along those lines, an employer also must pay its employees for all time that the employer “suffers or permits” employees to work. This is a common issue in many lawsuits and means that if an employer (e.g., a gym manager) actually knew or should have known that an employee has performed work for the employer, the employee must be compensated for all such work. If an employer knows or has reason to believe that the work is being performed, the employer must count the time as hours worked. Like it or not, the law was designed to protect employees and places much of the burden of compliance on the employer.

A Routesetter Scenario

Consider the following hypothetical example: Your gym pays one of its routesetters an hourly rate and has a policy banning off-the-clock work (as an aside, every gym should have this policy). The routesetter is scheduled to work until 5:00pm. At 5:00pm, the manager leaves for the day and notices that the routesetter still has two routes to complete. When the manager returns the next morning, the manager sees that the routesetter completed the two remaining routes last night but clocked out at 5:00pm in the gym’s timekeeping system. What are the gym’s payment obligations to the routesetter?

If your response is “none,” then you’re inviting a lawsuit. The gym has constructive knowledge of the routesetter working off the clock (through the manager). The gym now must talk with the routesetter to determine how late the routesetter stayed to complete the routes, and pay the routesetter accordingly. However, the gym is not without recourse and can discipline the routesetter for working off-the-clock and/or working unapproved overtime.

Keep Good Records

In addition to establishing a minimum wage and basic overtime requirements, an often-overlooked facet of the FLSA is the record-keeping requirements it imposes upon employers—including climbing gyms—to keep certain records tracking each employee’s hours worked and wages earned. The FLSA does not mandate a particular form for the records, but does require that the records include certain identifying information about the employee and data about the hours worked and the wages earned. And, not surprisingly, the law requires this information to be accurate, in the event an employer’s practices are ever subject to review by the United States Department of Labor (DOL) or a court. The complete list of required time and pay data can be found on the DOL’s website.

Climbing gyms, like all employers, must keep these records for at least three years. Some states may require that these records be kept for even longer periods of time due to lengthier statute of limitations for employees to bring wage-based claims. If you’re outsourcing your payroll to a vendor, they should be observing these record-keeping requirements, but you should confirm.

The FLSA and various state laws provide climbing gyms with flexibility in how they establish and carry out their payroll practices, but they contain many traps for the unwary. Climbing gyms must be mindful of the basic payroll policies and ensure whatever policies they implement are consistent with prevailing laws and are not exposing climbing gyms to unnecessary legal risks. So, when examining existing policies or implementing new policies, it is often helpful to consult an attorney to make sure everything is legally compliant. This small step may save a climbing gym the significant time and expense of having to later litigate the issue if the gym’s practices are challenged by the DOL or a disgruntled—and perhaps underpaid—employee.

Note: This recurring column offers general advice and is not intended to be used as direct legal counsel. Gym owners should consult a lawyer for their facility’s specific legal matters. Pill can be contacted directly here.

The post Ask a Lawyer: Avoiding Risks with Hourly Pay and Overtime appeared first on Climbing Business Journal.