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COVID-19 Waivers from Employees: A Bad Idea

on Thursday, 25 June 2020 in Covid-19 Information Hub

One of employers’ primary concerns as they reopen is their liability to others for exposure to COVID-19.  While obtaining prospective waivers from customers, vendors, or visitors may be a good idea depending upon the circumstances, obtaining such waivers from employees is generally not a good idea.

Prospective waivers from employees will typically not shield an employer from liability.  Moreover, seeking and obtaining waivers from employees may create a presumption by employees, government agencies, customers, and the public that the employer is not doing what is necessary to minimize employee exposure to the coronavirus.

“Waivers 101”

A waiver agreement is simply a promise not to assert a claim.  But a waiver is not a shield to all liability.  Prospective waivers are typically ineffective if the person in whose favor the waiver runs has engaged in gross negligence or willful, intentional, or wanton conduct.

Waivers also need to be made knowingly and voluntarily.  “Knowingly” means the waiver is made with the full knowledge of the rights being waived.  It should be unambiguous and obvious to a reasonable person and not included in boilerplate language.  And when a waiver is given by an employee to an employer, there is inherently a question as to whether it was given “voluntarily” – especially if the consequence for the employee not signing the waiver is termination of employment.  In other words, greatly unequal bargaining power between parties can render any waiver agreement – particularly a prospective waiver – unenforceable.

Because the waiver agreement is a contract, it needs to be supported by valid and sufficient consideration – either money or something of value to the person granting the waiver.  In the case of an employee, that could be a promotion, raise, or bonus.  But if the consideration is simply not being fired, it again raises the issue of whether the waiver is voluntary.  Moreover, if the individual granting the waiver is employed “at-will” (as most employees are), then the promise of continued employment for signing the waiver may be deemed invalid, “illusory” consideration by a court.  And finally, the waiver will typically not be binding upon third parties, such as an employee’s spouse or family members.

Workers’ Compensation and Waivers

As discussed in the Compensability Of Covid-19 Infections Under Workers’ Compensation Laws article on our Covid-19 Information Hub, employees are generally entitled to receive workers’ compensation benefits from their employer when they sustain a personal injury as the result of either an accident or an occupational disease arising out of and in the course of their employment.  Therefore, an employee may seek compensation for a COVID-19 infection allegedly sustained from their employment.

The good news for employers is that workers’ compensation is generally the employee’s “exclusive remedy” for job-related injuries and illnesses.  In other words, the employer is shielded from potentially unlimited liability in a tort action for negligence, so long as the employer pays the employee’s medical costs, missed work, and other injury-related expenses required by state workers’ compensation laws.

The exclusive remedy shield, however, is not impenetrable in all jurisdictions or situations.  Employers may be sued in some states outside of workers’ compensation, in tort, for gross negligence, intentional or willful misconduct, or for concealing the source of an employee’s injury which results in the injury worsening.  Additionally, some states do not extend the exclusive remedy shield to individual managers or owners.  Therefore, because of this potential weakness in the workers’ compensation exclusive remedy shield, should employers seek waivers from their employees?  Probably not.

Almost all states forbid employee waivers of workers’ compensation rights.  For example, Neb. Rev. Stat. § 48-131 states “no agreement by an employee to waive his or her rights to compensation under the Nebraska Workers’ Compensation Act shall be valid.”  No law could be clearer.  But while employees cannot waive workers’ compensation rights, can they waive possible claims they have in tort law against their employer for gross negligence or intentional misconduct?  They can, but remember that most states do not enforce prospective waivers of claims for gross negligence or intentional misconduct – which will likely be alleged by an employee who is attempting to circumvent the workers’ compensation exclusive remedy shield.  And, as previously discussed, the employer still needs to establish that the wavier was made knowingly and voluntarily, and was supported by valid and sufficient consideration.

Other Concerns

Employee waiver agreements will not shield employers from citations and monetary penalties assessed by the Occupational Safety and Health Administration (OSHA) for violations of the OSH Act’s “General Duty Clause” or the agency’s safety and health standards.  Indeed, waiver or no waiver, OSHA-covered employers have a legal duty to provide “a place of employment free from recognized hazards that are causing or are likely to cause death or serious physical harm.”  Moreover, OSHA may perceive an employer’s efforts to obtain waivers from employees as an attempt to skirt its legal obligation to provide a workplace free from recognized hazards.  In other words, if the employer is providing a hazard-free workplace as it is obligated to do, why are waivers from employees necessary?

Finally, aside from their legal limitations, employers should consider the effect that waivers may have on employee relations and morale.  Employees may perceive that their employer is relying on the waivers to avoid taking necessary and prudent steps to protect them from exposure to the coronavirus.  Customers and the public may have the same perception.  Those perceptions, coupled with the other problems discussed in this article, simply make employee waivers a bad idea for employers.

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