To Vaccinate or Not to Vaccinate that is the Question: or Trading a Jab for a Job.

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I am sure that Shakespeare never anticipated that his tortured Danish prince would be quoted hundreds of years later for a topic that didn’t exist when he lived. But here we are. 

The world is trying to emerge from the worst plague since the 1918 Influenza Pandemic with sporadic success. In 1918 and 1919, the government tried different things to stop that pandemic including mask mandates and business closures. The pandemic came to an end in the summer of 1919 when the infected died and the remaining population developed a resistance or immunity. In 1919, there was no vaccine. The first flu vaccine wouldn’t be invented until 1940’s according to History.com.  

In late 2019, early 2020, Covid-19 ground the world to a halt as the infection and death rates spiked without any hope of a ceiling. This time, however, we developed several vaccines that can stop or greatly diminish infection and the seriousness of symptoms if the vaccinated individual does get Covid. Certain universities have already announced that students must be “fully vaccinated” to return to campus this fall. So, the question is….. should employers and schools require employees, and students to get the vaccine as a condition of employment or admission? 

That simple question is a HUGE and loaded landmine ready to go off. It has worldwide health, community, political, racial, religious, and marketing implications regardless of which side of the debate you fall on. This article isn’t going to address those particular landmines but will look at the laws governing the issue as they stand today.  

Can your employer or school require you to get a vaccine to return to work or class?

Yes. 

But like most legal problems, it’s more complicated than that simple answer. 

Let’s look back at history again. This isn’t the first time the question of mandatory vaccines has existed. In fact, the United States Supreme Court addressed this very issue even before the 1918 pandemic. In 1905, the highest court in the land upheld mandatory smallpox vaccinations. In 1922, it upheld the exclusion of a child from public school because the child did not have the smallpox vaccine. So, yes, receipt of an education or work can be legally conditioned on receiving a vaccination.  

Consistent with the existing law, on Dec. 16, 2020, as the first vaccines were being approved for emergency use, the Equal Employment Opportunity Commission (EEOC) confirmed that a Covid-19 vaccination requirement by itself would not violate Americans with Disabilities Act (ADA) or any of the rules it administers. The ADA law prohibits employers from conducting some types of medical examinations. Other rules that may have been affected are Title VII (anti-discrimination based on religion belief) and GINA (anti-discrimination based on genetic information and make up). 

However (and you knew one of those was coming, didn’t you?), there are exceptions to an employer’s ability to require vaccinations. The employer will still need to make accommodations for employees who cannot get the vaccine for medical or religious reasons. State and local laws may also restrict employers’ ability to enforce vaccine mandates.

Making the decision to require vaccinations as a condition of employment doesn’t end the debate. 

What happens when your employee refuses to be vaccinated?

It depends. 

Most employees are hired on a “at will” basis meaning they can be fired for no reason or any reason as long as there is no discrimination or other violation. When the employee says, “no,” the employer likely has to dig a bit deeper. 

When employees refuse a vaccine, the employer should address their concerns and explain the reasons why the company has adopted a mandatory vaccination policy. Education and discussion with your workforce are key to imposing a vaccine mandate or even a strong recommendation. If the reason the person can’t be vaccinated is health or belief based, then the employee likely has to provide that employee with a reasonable alternative to vaccination. Small business attorneys can help you determine the best way to approach this subject with your employees. 

Another risk of a mandatory vaccine requirement is when employees refuse to receive a vaccine for reasons that aren’t legally protected, such as a general distrust of vaccines.  You may face firing a material portion of your workforce for refusal, or be faced with the choice of allowing some employees to ignore a company policy–which can lead to discrimination risks and employee morale issues. 

Can you fire 10%, 20% or 30% of your workforce and keep operating? 

Is there a better way?

While small business attorneys agree employees likely can require vaccinations, if you aren’t in a high-risk industry like health care, you may want to consider strong recommendations and incentives for vaccination rather than an all-or-nothing policy. 

Encouraging vaccinations can take a number of forms including: 

• Develop an educational campaign; 

• Facilitate vaccine access which may include paid time off for employees to receive the vaccine and recover from any potential side effects. 

• Reimburse the cost of vaccination. 

• Provide other incentives like gift cards, additional paid time off, cash bonuses or whatever motivates your workforce to get vaccinated.

When coming up with an incentive program, the employee needs to be aware of the limitations on these programs and the possible adverse-impact they may have on the members of the workforce who opt out. As of this writing, the EEOC has not provided guidance on the appropriate level of incentive for a “voluntary” program. Employees will want to consider alternative ways for those who opt-out of the vaccine to receive similar incentives, which may, in turn undercut the incentive program. 

What should employers do right now?

1. Talk to your employees.

Are your employees adverse to getting the vaccine? If not, then the problem is much smaller. If so, find out why, and what you can do to address their concerns. 

2. Put politics aside

Regardless of how we got here, the response to Covid-19 has become political. It was a badge of party affiliation to ignore mask mandates and restrictions on social gatherings. People made decisions based on politics and not health or business concerns. However, from a business perspective, your response should be based on: (1) the necessary and reasonable steps to keep your workforce and clients safe; (2) maintaining the viability of the company; and (3) corporate responsibility based on leadership and mission. You can, and should, acknowledge the political undercurrents of this issue and stress that the company’s response is based on preserving its employees and business rather than political views. 

3. Listen

Your workforce and clients are going to have their own views on the pandemic and appropriate responses. Are your clients uncomfortable going back to live events? Listen and reasonably respond to their concerns about the effectiveness of the vaccines, the side effects, and their general fears. Hear out the reasons why workers refuse to be vaccinated. Engage with them on how the decision not to vaccinate affects the business, and their co-workers. Be prepared to manage and mediate disputes between the vaccinated and unvaccinated. Be a role model and get vaccinated yourself, if that’s the behavior you want your employees to adopt. 

4. Educate and train your people

Employers have a duty to maintain a safe working environment for their employees. States are passing laws to insulate businesses from later Covid exposure claims where that business has acted reasonably to reduce the risk.

Your HR department (or consultant or you, as the business owner) needs to be ready to answer questions about the vaccine and company policy. The business also needs to prepare to respond to legally valid reasons to decline a vaccine like an underlying medical condition or a firmly held religious belief.  Keep in mind, your employees have the right to protest your vaccine program (or lack of one) and can’t be retaliated against if they do.  

5. Adopt a Policy

Rather than just declaring all employees must be vaccinated, a business will need to develop a written policy in advance of the mandate. Key elements of any policy will: (1) encourage employees to get vaccinated; (2) determine whom and under what circumstances employees (vaccinated or unvaccinated) will be allowed to return to the office or attend company sponsored events; (3) determine if proof of vaccination is required: (4) address those unable to be vaccinate for legally protected reason and instruct them to contact HR for possible accommodations; and (5) determine if incentives will be offered to encourage vaccination. Legal assistance is strongly recommended in creating your policy, 

Your HR department (or consultant or you, as the business owner) needs to be ready to answer questions about the vaccine and company policy. The business also needs to prepare to respond to legally valid reasons to decline a vaccine like an underlying medical condition or a firmly held religious belief.  Keep in mind, your employees have the right to protest your vaccine program (or lack of one) and can’t be retaliated against if they do.  

6. Consider incentives

When our children were younger, we often offered them a reward if they engaged in conduct we approved of. Get an A in a class? That’s $20 added to your allowance for each A. Positive reinforcement also applies for your workforce. If the vaccines are mandatory, then you need to pay the employees for the time needed to get them. As an incentive, you could offer paid time off for the entire day or any number of other benefits for getting the vaccine.  Under the American Rescue Plan Act of 2021, employers can receive payroll tax credits, through September 30, 2021, for giving their employees up to ten paid days off related to the vaccine and its health effects.

7. Be Flexible

The situation is still changing on a day-to-day basis. Predictions suggest that this won’t be the only pandemic in our lifetime. What works today may not work in 6 months. Constantly reassess the situation and what is in the best interest of your employees and business. 

Navigating the issues surrounding whether to require vaccines in the workplace is a legal landmine. Consult with the business attorney Fairfax, VA trust to learn the best steps for your business to take. If you’re unsure of the best vaccine policy for your business, or would like assistance with any other compliance matter, please follow the link below to request an appointment. 

PLANNING FOR UNEXPECTED COSTS IN YOUR CONTRACT

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Have you seen the cost of plywood recently? 

Dang!

I spent the past weekend in my garden redoing our garden boxes. Forty years of wear and tear (the boxes predated when we bought the property) can make even the best constructed wooden boxes fall apart. Our repair was at least five years overdue. Anyway, I’d previously priced out the materials but hadn’t been able to do the project a few years ago. Imagine my surprise when getting materials for half the job burst my budget! 

Building supplies, toilet paper and a host of other items have massively increased in cost over the last year. If I’d hired someone to do the work for me, and between when we signed the contract and when that company bought the materials, the costs vastly increased, who’d be paying for the added expense? Likely my contractor. 

Why? 

If your contract is silent on this issue – who pays increased costs – then you (as the performing party) will likely pay those additional costs. These expenses can include increased cost of materials like my lumber; personal protective equipment; cleaning supplies; physical barriers; signage; and Covid compliance officers… among other things. The small business lawyer Fairfax, VA residents trust can help you determine if your contracts offer sufficient protection. 

So, how do you plan for unexpected costs?

By having a contract provision that addresses the problem. 

Even before Covid, unexpected costs could crop up. For example, you contract to dig support piers down to the bedrock where the average depth is 18 feet and price accordingly, but the bedrock on this property is at 25 feet. Without a contract clause that allows you to pass on the extra costs from drilling down 7 more feet, you’re going to be eating that dirt. 

If you make certain assumptions in your contract (the bedrock is 18 feet down, or the lumber you need is $5.00 per board), it’s best to spell that out and what happens if that expectation is busted. So, while this article discusses Covid-related costs, it applies to any project where there is potential for material or other costs overruns. If you can get specific like “the pricing is based on drilling to a depth of no more than 18 feet and additional fees will apply if drilling exceeds 18 feet” that’s even better. 

You can plan for the unexpected with the help of a small business lawyer.

Top 5 Steps to Plan for The Unexpected.

By having your client acknowledge the possible problem and planning for it, you are making for a better client experience and fewer problems if you do have to issue a cost overrun invoice. 

You can plan for “unexpected” cost. Cost overrun clauses are a useful tool in your contract toolbox.  If your contracts don’t have cost overrun causes, if you are unsure if the one you have protects your interests to the fullest extent possible, or if you would like assistance with any other business matter, please follow the link below to request an appointment. 

An Employment Attorney Explains the Effectiveness of Covid Waivers

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As vaccines roll out and states roll back restrictions, businesses wrestle with keeping their employees, contractors, and clients safe and complying with ever-changing rules and guidelines. Many companies are relying on waiver, indemnity, and “assumption of risk” forms. But are they worth the paper they are written on? 

Like many aspects of dealing with Covid, the short answer is, “we’re not 100% sure.” Fortunately, we can look to how states address negligence claims as a good indication of how they would likely treat Covid waivers. This is an area where the rules and answers will change depending on your state, so remember that this article isn’t legal advice, and you should always obtain legal advice relevant to your particular situation and not rely on what you find online. Your local Fairfax employment attorney can help you navigate through these questions. 

All right. So, why are we talking about negligence? 

Because if someone is going to claim, they caught Covid (or were otherwise injured) because of something you did or didn’t do, “negligence” is the most common claim they will bring. To learn more about what negligence is, please check out our previous post here. The issues related to whether waivers or assumption of the risk acknowledgments can protect your business from a later claim relate to all forms of negligence claims and not just those related to Covid-19 and its variants. 

The Quick Skinny on Negligence Claims


To even start the discussion, you need to understand that we are going to have to assume someone could state a negligence claim for contracting Covid. To prove negligence, a plaintiff has to show 3 things: (1) a duty owed to them by the defendant: (2) the defendants’ actions or inactions violated that duty; and (3) the defendant’s conduct caused a legally recognizable injury to the plaintiff. 

When you’re talking about an employer/employee relationship, the employer has a duty to provide the employee with a safe and healthy work environment. However, an employee’s claims for injury while working will generally fall under worker’s compensation and not separate negligence claims. The issue of worker’s compensation and Covid infection is an open and evolving one. 

Who sets the duty and what it is in terms of Covid infections is unclear. Generally, what duty exists and what conduct falls below this level is determined on a state-by-state basis. So, in a state that has lifted all Covid restrictions, there may be no duty. In a state that still requires temperature and monitoring requirements, there may be. To add to the complications, since the Centers for Disease Control (“CDC”) has issued “best practices” guidelines, those guidelines may become a national standard. 

We’re going to presume that an employee can sue for Covid exposure. Whether you have a duty to clients or attendees at an event varies depending on the relationships. Even assuming you do, that duty is to act as a reasonable person. We’re also going to assume that there was a breach of these amorphous duties and that the Plaintiffs can contact trace their Covid infections to your workplace, shop, or event. 

Take some solace in the fact that I had to do a whole lot of assuming to get to the point where even talking about waivers or assumption of the risk agreements made sense. Anyone trying to assert a negligence claim for contracting Covid is likely to have a hard time doing so.

What’s a waiver?

 

You can agree that you won’t take certain actions. You are “waving” your right to do or not do something. Often a waiver happens after you have the right. But in certain cases, you may be able to waive that right before it ever matures. For example, you may fall three months behind in your rent. Your landlord and you then agree that the landlord will accept two months’ payments and “waive” or forgive the third month. 

Negligence waivers are different. They are often signed before you are harmed. Have you ever gone, or taken your child, to a laser tag place? Before you are allowed to check out the equipment to play, the business has you signing a waiver that you won’t sue them if you get hurt. 

A waiver may read something like this: 

By signing below, I hereby release and agree to hold Company X harmless from and waive on behalf of myself, my heirs, and any personal representatives any and all causes of action, claims, demands, damages, costs, expenses, and compensation for damages or loss to myself and/or property that may be caused by any act, or failure to act of the salon, or that may otherwise arise in any way in connection with any services received from Company X. I agree to release Company X from any and all liability for the unintentional exposure or harm due to the Coronavirus (COVID-19)

 Essentially, you are giving up your right to sue or collect damages if you contract Covid.

What’s assumption of the risk?

 

Some activities are inherently dangerous. Bungee jumping springs to mind (pun intended, I crack myself up).  By agreeing to jump off something with an elastic band tied around your ankles, you are knowingly risking back injury, and a host of other pains and minor injuries. You “assume” these risks since they are the reasonably foreseeable results of bungee jumping. An assumption of the risk clause may read something like this: 

I acknowledge that Company X has put in place preventative measures to reduce the spread of the COVID-19 virus, to the best of their abilities. I further acknowledge that no guarantee exists regarding whether or not I may contract COVID-19. I understand that the risk of becoming exposed to and/or infected by the COVID-19 virus may result from the actions, omissions, or negligence of myself and others, including, but not limited to, staff and other clients. I acknowledge that I increase my risk of exposure to COVID-19 by participating in services rendered. I acknowledge that I must comply with all set procedures to reduce the spread while in attendance.

A tip off to these clauses is the use of the phrase “I acknowledge…” 

Let’s go back to bungee jumping and the “assumption of the risk” agreement. Signing the agreement didn’t, however, have you assume the risk that the person weighing you and measuring out the bungee cord will get it wrong, so you stop too short and get whiplash because you are moving too fast on the recall. When that happens, the person is negligent. This is why you’ll often see assumption of the risk clauses in waiver agreements, 

Are they worth the paper they are written on?

 

It depends on your state. 

There is a good argument that a person should not be able to waive negligence claims before they occur. After all, if the company performing the service knows that it can’t be held responsible for any injury its causes, why should it be careful? Society as a whole faces a greater risk when advanced waivers of liability are possible. This society-based argument is what lawyers call a “public policy” argument. When a state follows this public policy, these waivers are not enforceable and only serve to discourage people from bringing valid claims. 

Other states hold the individual’s right to freely contract is more important than the generalized social right. Those states will enforce a proper and valid waiver and assumption of the risk agreement even when signed before the damage happens. 

What makes a valid waiver and assumption of the risk agreement?

 

Three states—Louisiana, Montana and Virginia—disallow pre-occurrence negligence liability waivers entirely. Where the pre-occurrence waiver of negligence claims is generally allowed, there are still certain standards for these agreements before a specific agreement is enforced. Waiver requirements and laws vary by state so an enforceable waiver in the District of Columbia may not be enforceable in Texas or California. 

According to employment attorneys, three questions that can determine a waiver’s enforceability include:

Does the waiver use clear and unambiguous language?

 

If not, then it’s not worth the paper it’s written on. A waiver is a knowing relinquishment of a known right. When you are talking about a right that hasn’t occurred yet, it’s important to state what the claim might be. It’s why doctors tell you all the things that could go terribly wrong before your surgery. Informed consent is key to enforceability of a waiver. If the contract isn’t clear, it’s not enforceable. 

The waiver needs to be reviewed and signed before the person is at risk for the injury. So, if you are using them for an event, the attendee must have the chance to review and sign before entering the building. Use clear and unambiguous language in your waiver. Specifically, mention the risks. For Covid-19, you would include these risks and other basic information, like:

The highly contagious nature of the virus

Possible ways a person can get infected

Risks a person takes on after entering the business.

It must be easy for your customers or employees to understand that they’re agreeing to waive their legal rights to sue for negligence. This is often done by putting the waiver language in larger, bolded, or capitalized font. Some states may require larger fonts and bold type for waivers. If you have any questions on how to produce an effective waiver form, contact a Fairfax employment attorney today.

Was the waiver signed voluntarily?

 

In this context, voluntary doesn’t just mean they willingly wrote their name. It means they had an actual reasonable choice not to sign and the parties had equal bargaining power. Let’s put this in the gym context for a moment. You don’t have to go to the gym. Yes, it’s a good choice but it’s not something that is required for you to meet the basics of survival. Yes, the gym in question may even be Da’ Bomb!, but you could go to another gym. So, when you sign Da’ Bomb!’s waiver form, you’re doing so voluntarily. You had other viable options. The same analysis will likely hold true for concerts, seminars, sporting events and other large crowd gatherings. 

There may be a different result when an employer asks an employee to sign as a condition of employment. Now the parties are in two very different negotiating positions and the employee is in a “take it or leave it” pose. “Take it or leave it” or “adhesion” contracts can be valid. Most loans, insurance, and car sales contracts are adhesion agreements. They cross the line and aren’t worth the paper they are written on when they: (1) go beyond the terms that the weaker party would have reasonably expected, and (2) the contract is exceptionally unfair (“unconscionable”) to the weaker party. The first factor goes to what the customer might have expected, and the second to the motives of the stronger party. In the employment context, the company has a duty to provide a safe and healthy working environment for its employees. A Covid or other health-and-safety-based waiver would relieve the employer of this obligation. Time will tell if the employer is unfairly released, but there is a significant risk that the waivers won’t be upheld in the employee/ employer context. 

Did the person signing have adequate time to review the waiver?


Remember that since you must know that you are giving up certain rights by signing a waiver, you need adequate time to review the agreement. 

Enforceability of COVID-19 Waivers Vary by State

Some states don’t permit waivers for personal injury claims whether based on Covid or other negligence. Others have specific wording or other requirements for a waiver to be enforceable. Some states may not enforce posted waivers, but require the person to sign a specific agreement to waive these rights. Because waiver requirements and enforceability varies on a state-by-state basis, you must understand your local laws. A form of the internet just won’t work here. 

Use Legal Counsel for COVID-19 Waivers

If you are considering using Covid waivers, consult with an attorney. The attorney can give you advice on what to include in the waiver and whether it’s likely to be enforceable in your state. Some states have enacted legislation to protect certain classes of people or businesses from Covid claims. In some cases, your business will qualify for protection against claims for negligent Covid transmission. 

Finally, even if a Covid waiver or assumption of the risk agreement isn’t enforceable in your state, consider taking steps to educate your customers and employees about risks and steps they can take to stay safe, like marking off the places to stand so customers are six feet apart from the others in line. Not only does taking these steps show your employees and customers you care about their health, they also help establish that you met your duty of care and possibly defeat a later negligence claim. 

If you’re contemplating Covid waivers and aren’t sure whether they are worth the paper they are written on, or would like assistance with any other business matter, please follow the link below to request an appointment. 

Understanding How a Small Business Owner Can Protect Themselves From Negligence Claims

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A company had made a mistake. It’s a big one. And someone was hurt because of it. Is the business responsible for that harm (or as a business attorney likes to call it, those “damages”)? 

Very likely. 

What many business owners don’t realize is even when they don’t have a contract with the person who was harmed, the business still could be held legally responsible for the injured person’s damages based on the company’s “negligence.” As established by State and Federal law, everyone has a duty to act reasonably and take a reasonable amount of care in their dealing with others. Mere carelessness can lead to liability. 

The legal definition of negligence is intentionally broad. What is negligent in a specific situation may not be in another. To prove negligence, a plaintiff has to show three things: (1) a duty owed to them by the defendant: (2) the defendants’ actions or inactions violated that duty; and (3) the defendant’s conduct caused a legally recognizable injury to the plaintiff. 

Duty of Care

Generally, we’re free to act however we want, as long as we’re not impacting someone else’s freedoms or interests. A society and law holds that everyone has a duty to take “reasonable care” to avoid harming others. “Reasonable care” is acting reasonably in the situation or taking the steps a reasonable person would to ensure no harm happens to another. Duties of care are imposed by the law. The pesky things can be found everywhere. In the Occupational Safety and Health Administration (OSHA) guidelines for companies to their employees. In the building codes for construction companies to the occupants, owners and neighbors of the property they are building. In the “common law,” meaning over time the courts have decided that certain duties exist, for the general public. In professional guidelines for the professionals to their clients.  And on and on. These guidelines establish the minimum standard of care for your business to a horde of people. If you have any questions, a small business attorney serving the residents of Fairfax, VA can provide clarity for any ambiguities in the legal concept of “reasonable care.” 

An easier way to look at a duty to care is to ask if the plaintiff is in the group of people likely to be harmed if you don’t take care. If your IT business doesn’t install the virus updates on your client’s server it is likely that the client will be harmed by a computer virus. If you throw cold water on the sidewalk when the temperatures are below freezing, you now owe (and have violated) a duty to anyone walking nearby who might slip on the ice you created.

This duty can also be modified in special circumstances. In the 1997 movie Liar Liar, a character is talking to her boss, the business attorney Fletcher Reed, played by Jim Carey, about justice. She asks him if it is justice that her friend had to pay the potential burglar for falling through her skylight and hurting himself. Fletcher answers that, no, it wasn’t. Before the other character can agree with him, Fletcher adds that if he’d been the burglar’s attorney, he would have gotten him twice that amount. Why? Because property owners must use reasonable care to protect people on their property from foreseeable harm. Even if that person is a trespasser! Professionals (doctors, lawyers, dentists, architects, and others like them) owe a special and heightened duty to act as a reasonable person in their profession. Professional negligence is called “malpractice.” 

Violation of the Duty

Once a duty is established, a plaintiff has to show the business violated it by failing to act reasonably when compared to a reasonable person. This mythical “reasonable person” doesn’t exist. Instead, it’s a social construct of the behaviors society wants its citizens to have. You know, always thoughtful, careful, never in a rush, always seeing all the ways things can go wrong and taking steps to protect against them. Yup. The “reasonable person” never makes a mistake. This is also why we have different levels of negligence.

There are two main degrees of negligence: simple and gross.

Simple negligence is when the company makes a mistake that violates its duties, but the mistake isn’t intentional or happened because the person was reckless. 

The other form of negligence is gross. Literally.  “Gross negligence” is when someone is indifferent to, or knowingly violates, their legal duties regarding someone else’s rights. It’s a conscious and voluntary disregard of the need to use reasonable care, which is likely to cause injury to a person, property or both. 

To make the difference clearer, I’m going to take a quote from LegalDictionary.net since it has one of the best examples of an accident, simple negligence and gross negligence I’ve been able to find. 

Example of a Non-Negligent Accident 

The community soccer league plays soccer every Thursday and Saturday night at the local park, where friends and families gather to cheer the teams on. Brent kicks a ball that strikes a man standing near the sideline, causing a head injury. The players are taking reasonable care by playing at the soccer field, rather than in someone’s yard, and hard-kicked balls going astray are just a part of the game. Because of this, the players are not guilty of negligence.

Example of Negligence​

The soccer league needed more parking space for spectators, and so marks off a small stretch of property that is very close to one end of the field. During the first game after the new parking space is put into use, a player kicks the ball past the goal, into a windshield, breaking it. The league had failed to take reasonable care to ensure cars parked near the event would be out of range of play. Having acted negligently in choosing a spot to park cars, the league may be held responsible for the damages.

Example of Gross Negligence

During one of the soccer games mentioned above, Grant fetched the ball Brent had kicked off the field, and in his exuberance, (Grant) grabbed a metal lawn chair sitting on the sidelines, and spiked it, hitting another bystander. Throwing chairs is not a reasonably anticipated act during a soccer game, and Grant not only failed to look for bystanders, but acted recklessly in throwing the chair, with no regard for the safety of others. Grant has committed gross negligence.

Do you see how in the accident, what happened was unfortunate but one of those things that can happen even when everyone is being careful? How in the simple negligence example, the league made a decision (an intentional act) about where to place the parking but the decision didn’t take into account all the factors and property was damaged because they chose a spot too close to the field? In the last case, Grant took action (throwing the chair) that was outside normal or “reasonable” actions without looking to see if anyone would be hurt? Because of his lack of care for those around him, Grant’s actions were grossly negligent. 

Causation

Causation has two factors. First, but for the actions or inactions of the defendant, would the plaintiff have been injured. This part is usually pretty easy to prove. If your IT company didn’t install the virus protection software and the client’s system was infected by a ransomware program, then yes, the “but for” test is met. But for your failing to update the protection, the client’s system would not have been infected. 

The second factor focuses on the relation between the bad act and the results. While there’s the butterfly effect to most actions, the court limits how far down the chain of occurrences a person is responsible for.  The court asks if the injury was reasonably foreseeable from the violation of the duty. When the connection gets too attenuated the court will cut the link. For example, a driver runs a red light because he was texting and hits another car. The driver in the second car is harmed because: (1) she suffered a broken arm and concussion; (2) her car is wrecked; and (3) she missed a critical business meeting and the contract was awarded to someone else. Only the first two injuries are something the second driver can recover from. The fact that she lost an opportunity wasn’t the reasonably foreseeable result of the first driver’s running the light. 

Damages

If a plaintiff proves negligence, the court will award them money damages in an amount sufficient to make them “whole” (“Compensatory damages”).  I put “whole” in quotes because there are just some injuries that no amount of money can make right, like the loss of a loved one or permanent physical injury. Also, as I noted above, some injuries that result from the bad acts are too far removed from the likely injuries to be recoverable. The amounts and types of these damages will vary widely depending on the situation. The broken windshield in the simple negligence example is a relatively inexpensive fix. If a construction company fails to properly build a deck and it collapses harming five people, those damages could be massive. If the company was “grossly negligent,” a court can award punitive damages, which is a second money judgment designed to prevent the bad actor from engaging in the same conduct in the future. Many states have limits on how much a punitive damages award can be. In some cases of gross negligence, the bad actor can be charged criminally. Yikes! 

Defending Negligence Claims

In addition to arguing a plaintiff didn’t provide evidence to support a negligence claim, a defendant has certain defenses to argue that even though it was negligent, they are not responsible for the resulting damages. 

The first defense a business attorney may argue is that the activity was inherently dangerous and that by participating in it, the plaintiff “assumed the risk” of the reasonable injuries likely to incur from engaging in that action. For example, boxing is an inherently dangerous activity. By boxing, you are agreeing to be punched, often in the face. Your later diagnosis of a concussion and treatment for the cuts and bruises will not support a negligence claim against your opponent, the boxing club, event promoters, etc., because you knew getting hit in the face was part of the sport when you agreed to take part. However, if your opponent hits below the belt, i.e. violates the rules, and you are injured, you have not assumed that risk. You also can only assume known risks.

The second defense has a bunch of different names but boils down to the risk was “open and obvious.”  You may see called the “open and obvious risk,” “contributory negligence,” or the “last clear chance” doctrine. Each state has a different take on these defenses. So, you need to check your local law to see how they apply to you. The heart of these defenses are the plaintiff could have done something to avoid the injury. A small business attorney in Fairfax, VA can help clarify these terms.

The open and obvious defense is used when people are injured on someone else’s property. If the store has put up a “caution-slippery floor” sign and you choose to run through the area anyway, when you slip and fall the store isn’t responsible for your injury. Contributory negligence is similar but applies to more than just property-related claims. For example, a pedestrian steps out into a business street from between two parked cars (rather than at the stop sign) right in front of an oncoming car and is hit. “Last clear chance” and “contributory negligence” may be in play. The pedestrian was also negligent by not using the crosswalk and stepping out from an area the driver couldn’t see and that negligence “contributed” to the accident. If the pedestrian steps out into the street when the driver who was going the speed limit doesn’t have enough time or space to stop, the pedestrian was also the person with the “last clear chance” to avoid the accident. 

Depending on your state, the plaintiff’s contributory negligence can prevent their claim for damages completely or in part. Virginia is a contributory negligence state as of the date of this post. That means in the pedestrian example above, the pedestrian cannot recover from the driver even if the driver was also negligent (as in speeding or texting). Most states that allow this defense, however, compare the relative fault of the parties (“comparative negligence”). So, if the pedestrian was 70% responsible for the accident but the driver was 30% responsible because he could have stopped if he was paying attention, then the plaintiff could receive 30% of her damages from the driver. 

Preventing Negligence Claims

Phew! That was a lot.

So, how do you prevent negligence claims? 

By ensuring your business’s conduct meets the applicable standard of care. First and foremost, this means knowing what they are. Consult the professional or other guidelines that apply to your business. This is likely where the “duty of care” will be found. Consult with a business attorney about these obligations as they do vary from state to state and business to business. 

You’ve identified the standards, now what? Have procedures in place to ensure that each worker is meeting or exceeding the standard of care. Have you ever seen a building inspector do her job? She has a detailed list of the things she’s checking for each inspection. This standard procedure helps ensure she doesn’t forget or overlook items she has a duty to inspect. Establish a corporate culture that strives for excellence and doesn’t tolerate short-cuts or hiding mistakes. 

Mistakes happen but they don’t have to end your business. Taking reasonable care and implementing policies to ensure the standards are maintained goes a long way in reducing negligence claims. Even when a mistake is bad enough to be a negligent act, having procedures in place to maintain the standards will help keep a simple claim from becoming a gross one.  

If you would like to learn more about preventing and responding to negligence claims in business, or would like assistance with any other business matter, please complete the form below. 

What is force majeure and how does it affect your business?

force majeure

The phrases “force majeure” and “Acts of God” have become all too common in our everyday business discussions over the last year and a half. In March 2020, United States businesses faced significant liabilities because they could not perform their contracts due to matters beyond their control, like a global pandemic and government-mandated shutdowns. Force majeure provisions help people manage the unmanageable.

Essentially, these contract provisions prevent either party from violating the contract if the reason they can’t perform is because of certain events beyond their control. The most common provision is one that allows more time for a party to perform. If you are supposed to build a house by June 1, but certain events occur that prevent you from working for 30 days, then the delivery deadline is automatically moved to July 1.

The trigger for force majeure protection is an event that can’t be reasonably anticipated, which is where the phrase “act of God” comes from. Triggers aren’t something that can be planned for at the time you enter into the contract. For example, I just contracted with a company to fix the foundation of my detached (thank goodness) garage. The company was going to drive pillars into the soil until it hit bedrock to stabilize the building. Having to push the pillars down 8 feet or 22 feet is something the foundation company can plan for at the time we sign the agreement (it was 22 feet, by the way). Instead, events that trigger force majeure clauses commonly include hurricanes, blizzard, and other weather-related delays. But that’s not all they can do.

Defining the force majeure triggering events

act of god tornado
covid force majeure provision

 As used today, most business law firms use force majeure clauses often cover more than the weather. After the September 11 attacks on the United States, force majeure clauses were updated to include acts of terrorism. If your need the owner to pick out appliances before you can start on the kitchen renovation, your force majeure clause may include the owner’s delay in picking out those items. Since March 2020, I’ve been revising client’s force majeure provisions to address Covid-19, and the related government shutdowns and limits on businesses. In drafting these clauses, lawyers try to strike a balance between trying to cover all possible unknowns (an impossibility) versus being too general. A force majeure can run from something as simple as “Force majeure means all events that are beyond the reasonable control of the performing party” to a lengthy recitation of presently known force majeure events with a catch-all for things we can’t anticipate.

Example of a detailed force majeure definition

A “Force Majeure Event” is any failure or delay in fulfilling or performing any term of this Contract  when and to the extent such failure or delay is caused by or results from acts beyond the Contractor’s reasonable control, including, without limitation: (a) the act or neglect or default of the Owner; (b) casualty damage , (c) problems with labor or material over which the Contractor has no control; (d) any government control, regulation, restriction or the allocation of labor, supplies or materials (e) acts of God and natural disasters; (f) flood, fire, or explosion; (g) war, invasion, riot, or other civil unrest; (h) actions, embargoes, or blockades in effect on or after the date of this Agreement; (i) national or regional emergency; (j) strikes, labor stoppages, or slowdowns or other industrial disturbances; (k) compliance with any law or governmental order, rule, regulation, or direction, or any action taken by a governmental or public authority, including but not limited to imposing an embargo, export or import restriction, quota, or other restriction or prohibition, or failing to grant a necessary license or consent; (l) shortage of adequate power or telecommunications or transportation facilities; (m) inability to secure labor; (n) related to Covid-19, or (o) any other event beyond the reasonable control of such party.

Benefits of a longer force majeure definition

The benefit of the longer definition is it reduces future disputes if specific events occur like the property upon which the house is being built is flooded and still retains the catch-all to expect the unexpected. The shorter version is less precise and may result in disputes as to whether the event qualifies as a trigger. Regardless of which approach you take, a force majeure provision won’t prevent all disputes about whether it applies. New and novel situations that come under the catch-all language will always be subject to interpretation.

What do force majeure provisions do, really?

what force majeure can do

The most common force majeure provisions give you more time to perform without violating the agreement. How does this work out in the real world? Well, let me give you an example.

By May 2020, most of America was still under tough Covid lockdowns. In Virginia, for example, outdoor pools were not allowed to open until shortly after Memorial Day. For a pool contractor, this posed a problem. After all, the company was under contract to have those pools ready and open for use by Memorial Day. Without a force majeure provision, the contractor would have been in default for not opening the pools when agreed, and the clients could have terminated the contract or even sued the company for damages. Because the contract had a force majeure provision, the contract wasn’t violated, and the client remained bound by it. 

What can’t they do?

what force majeure cannot do

They can’t do more than they say they will. Let’s take that pool company example again. Outdoor pools were allowed to open on June 4, 2020, at limited capacity and with certain restrictions. Many of the clients weighed the cost-benefit of opening their pools. When they decided it wasn’t worth the hassle of opening the pool that summer, many of the clients tried to cancel or demand a discount/ refund for the season. Unfortunately, for them the only remedy the contract provided for a force majeure event was a delay in performance. The contract didn’t allow for a discount in the price because the pool would be open for fewer days or not open at all.

Now, I’ve said it before and will likely say it again, there’s what the law allows and then there’s good business. The contractor was allowed to demand the full price for its contract. However, that’s not good business. Realistically, in a situation like what happened in 2020 where the events were so far outside of what could be anticipated, there were lots of contract renegotiations, especially in situations where the parties had a long-term relationship rather than a single transaction. But having the force majeure provision allowed the contractor to negotiate from a place of strength rather than from correcting or “curing” a contract violation.

Okay, but is that all they can do?

force majeure provision options

While these provisions are best known for preventing a party from being in default for non-performance and granting them more time to get the job done, that’s not all they can do.

A force majeure provision can:

  • Prevent the performing party from violating the contract because of events beyond their control
  • Continue the performance deadlines for the length of the interruption. As an example, if a blizzard shuts down a jobsite for 10 days, then the performance deadline will be extended out by 10 days;
  • Exclude monetary defaults from the protection of the provision. In the example with the contractor, while it was given more time to perform, the customer still had to pay on time based on the original deadlines. This exclusion is particularly useful in a fixed price contract where the client is paying set amounts over the duration of the contract that don’t necessarily line up to when the contractor will incur those expenses;
  • Allow the performing party to recover increased costs and expenses due to the event. As an example, the cost of construction materials skyrocketed in response to the shortages of materials and increased demands after Covid or a fire destroys half of the work already completed. Without a provision allowing the contractor to pass these expenses onto the client, the contract may have gone from a profitable one to a loss for the contractor. 
  • Allow for a renegotiation of terms to meet the new situation;
  • Allowing the parties to cancel the agreement without penalty if the event continues beyond a certain length of time.
  • Provide for the payment of de-mobilization and re-mobilization costs; or
  • Any other terms that are appropriate to the relationship between the parties and the things contracted for.

Every force majeure clause is different

A “standard” force majeure clause doesn’t exist. They differ from contract to contract. What triggers your force majeure clause and what happens next should be tailored to your business.

Force majeure clauses are strictly construed

If your contract has a force majeure clause, read it carefully. Generally, court follow what the clause says without any additions. So, if the provision doesn’t cover fire destroying the building, a fire may not excuse nonperformance. When Covid became a global pandemic, most force majeure provisions didn’t list “pandemics, epidemics, contagion or diseases” or government required shut downs. There were arguments that Covid and the related shut downs wasn’t covered and equally compelling arguments that it was an “act of God” or covered by the catch-all phrase.  A good contract limits uncertainty not causes more. If a compelling argument exists for either result, your chances of litigation increase.  Understand the limits of your force majeure provision.

The Importance of Notice

legal notice

If your contract has a force majeure clause, and you intend to use it to delay or stop performing, be sure to let the other party know you are. If you don’t, you may waive your right to rely on a force majeure clause. Even if you don’t lose this right, you can create ill-will by not letting the other party know what’s happening. It’s good business to keep them informed. Also, keep in mind that your contract may require you to give “notice” in a specific way. If so, make sure you follow those requirements.

Your Duty to Mitigate Damages

A force majeure provision isn’t a total “get out of jail free” card. You still have an obligation to act reasonably This includes taking all reasonable steps to avoid or reduce (“mitigate” in lawyer-speak) any harm caused by the force majeure event. For example, a construction company that can’t obtain a specific item from a vendor due to shipping delays might obtain and substitute a comparable item from another company. During the Covid shut-downs, restaurants who weren’t able to have in-restaurant dining switched to take-out orders and delivery to reduce the harm. Depending on their contracts and specific force majeure provisions, if the restaurants had a 50% drop in revenue based on the shut-downs, they might receive a 50% deduction on their rent.

Is all hope lost if I don’t have a force majeure clause and the unexpected happens?

No. But getting relief will be a lot harder.

The law recognizes that sometimes performing a contract will become impossible based on later events. This “impossibility” or “frustration” doctrine is a last resort argument that may give you some protection if you don’t have a force majeure provision. However, the grounds for this defense are pretty limited. Generally, three things must exist before this defense applies, The event that makes performance impossible

  • is not the fault of either party;
  • was not and could not be foreseen when they entered into the contract, and
  • makes it physically or commercially impossible to fulfill the contract or frustrates the core purpose of the agreement.

Needless to say, these are pretty high hurdles to jump. You are better off planning for the unexpected with a force majeure provision that hoping the events that happen fall into this narrow exception. Even when the impossibility defense applies, you’re still likely to have to go to court to obtain it benefit.

Force majeure or acts of God clauses are a useful tool in your contract toolbox.  If your contracts don’t have force majeure clauses or are unsure if the one you have protects your interests to the fullest extent possible, or would like assistance with any other business matter, please contact Nancy at N D Greene PC complete the form below.  We respond very quickly.