Unsupervised Childcare Costs Club’s Parent Company $13 Million

This article appeared in the Jan/Feb 2023 issue of Athletic Business. Attorney John Wolohan ([email protected]) is a professor of sports law in the David B. Falk College for Sport and Human Dynamics at Syracuse University, where Beth Perez is a Ph.D. student in Higher Education. Anyone who offers childcare in a fitness setting should pay special attention to this article.

The reader should also note that there is no mention of a liability waiver in the article so one can only suppose that there was no waiver required. This is especially of interest because California is one of the few states that will enforce waivers signed by parents on behalf of minor children.

By John Wolohan and Beth Perez

As anyone who owns or manages a recreation facility knows, the key to a successful recreation business is customer service. Meeting all the needs of your patrons in terms of equipment, activities and other amenities is essential. One amenity that an increasing number of clubs have added to assist working or busy parents is childcare. Normally, mom or dad will drop off their children at the fitness facility’s childcare center and then proceed to work out.

While childcare centers provide parents a valuable benefit, such centers present facility owners and managers with added responsibilities beyond the traditional instruction and supervision of adults taking place on the fitness floor. Failure to meet this additional supervision requirement can have dire consequences, as illustrated in Jane Doe v. Fitness Alliance LLC.

Surveillance of supervision

While visiting EōS Fitness in Palm Springs, Calif., on Jan. 31, 2020, a mother signed her two young children, Jane Doe and her brother, into Kids’ Club, the gym’s daycare center, and proceeded with her workout. A short time later, John Roe, was signed in by his mother.

To supervise the children better, and to keep the younger children separated from the older children, the club’s daycare center consisted of two rooms. In one room, the club supervised children younger than 18 months. In the other room, the club supervised children 18 months to 12 years of age. Company policy required that there be an employee in both rooms supervising the children. On this day, however, the club was short-staffed, so it only had one employee supervising the two rooms in violation of club policy. Moreover, three of the club’s managers were in one room of the Kids’ Club chatting to the daycare attendant, thereby distracting her from her supervision duties.

Surveillance video later revealed that during the time the children were left unsupervised in the Kid’s Club, John Roe, a 13-year-old boy, sexually molested Jane Doe, a 5-year-old girl, intermittently for more than an hour. In addition to groping the plaintiff’s genitalia, abuser Roe exposed himself and forced the young girl to touch him. At no time did the Kids’ Club attendant or managers realize what was happening in the next room.

After she was picked up by her mother, Jane Doe told her mother what had happened to her at the Kids’ Club. The mother called the police, and after reviewing the surveillance video, the boy was prosecuted. Jane Doe, meanwhile, suffered from post-traumatic stress disorder, depression and anxiety. Doe had frequent anger outbursts, nightmares, sleep problems, fear of being alone, self-esteem issues and body image concerns. Due to the assault, Doe is fearful of men and older boys and has a changed relationship with her father and older brother. All of this has caused her to undergo therapy. According to her attorneys, she often asks, “Why did that boy do that to me?” and “Am I always going to feel this way?”

In light of this trauma, Doe and her mother sued the club for negligence. In particular, Doe claimed that the EōS Fitness’ Kids’ Club was liable for negligent supervision.

To establish a negligent supervision claim, Doe must establish that 1) the EōS Fitness Kids’ Club accepted the responsibility of supervision (duty of care), 2) the supervisor failed to properly monitor the injured party (breached their duty), 3) the injury was a direct result of the failure to supervise (causation), and 4) the injury was a foreseeable result of negligent supervision (damages).

Responsibility for damages

When considering the awarding of damages, the court will generally look at actual damages such as lost wages, pain and suffering, and medical expenses. In extreme cases, however, the court can also award punitive damages, which are designed to punish the party that caused the injury.

While EōS Fitness seemingly had very little to defend, they refused to settle the case through 18 months of litigation. The evidence presented at trial against the club included the fact that the club failed to have any policies and procedures regarding child sexual abuse, which would have likely prevented this abuse from occurring; that the club fired the Kids’ Club manager the day before the abuse, and thus did not have proper staffing; and that there was a longstanding problem of non-daycare staff hanging out in the Kids’ Club, causing a distraction for the childcare attendants.

In fact, while EōS Fitness admitted it was negligent and that its negligence was a substantial factor in causing injury to Doe, the club contended that the criminal acts of Roe, the 13-year-old boy, were the main reason for Doe’s injuries and that the club should not be held liable for the intentional torts or criminal acts of a third party. Therefore, any damages or injuries suffered by Doe should be the responsibility of Roe, not EōS Fitness.

The jury in Riverside County Superior Court, however, took only one day to render its verdict in favor of Doe, awarding her $5 million in past non-economic damages (mental suffering and emotional distress) and $8 million in future non-economic damages. In reaching their decision, jurors found that John Roe was also negligent, but that his conduct was not a substantial factor in Doe’s injury. In particular, the jury concluded that if EōS Fitness had properly supervised the childcare rooms, Doe’s injuries could have been prevented. As a result, EōS Fitness was allocated 100 percent responsibility.

Staff up or shut down 

What are the key takeaways for the fitness industry, especially those facilities that provide childcare?

First, while a $13 million lawsuit may have some club owners and managers thinking of closing their childcare centers, such a reaction would likely do more harm to your business than good. As mentioned above, one of the reasons why fitness clubs and recreation centers have childcare facilities is so that parents can work out without having to go through all the hassle of finding and paying a babysitter. Having a childcare facility at the club allows parents to not only save money on babysitters, but also work out on their schedule, not the babysitter’s. This benefit cannot be underestimated in increasing club memberships for parents of small children.

Second, if you are going to have a childcare center in the club, it is important — as the jury in Jane Doe v. Fitness Alliance LLC noted — that you have policies in place to ensure that the facility is properly staffed, that the children are properly supervised and that all employees, not just those working with children, have ongoing training about the dangers of child sexual abuse. As illustrated by Jane Doe v. Fitness Alliance LLC, increasing staff awareness is vital to protecting against child sexual abuse.

Finally, one of the keys to providing proper supervision is to have qualified and properly trained staff, and in appropriate quantity. Whether it is lifeguards in the pool area, coaches supervising players, or childcare attendants watching young children, it is important that you have enough staff present for the activity.

In this case, the Kids’ Club was understaffed, with only one employee watching the two childcare rooms, which was in violation of company policy that there be a childcare supervisor in each room. While having the proper staffing would have probably prevented the sexual assault on Jane Doe, there are other reasons — choking hazards, for example — to have a full staff around young children. While it may have upset a few club members who would not have been able to work out that day, an easy solution to the EōS Fitness staffing problem would have been to simply shutter the Kids’ Club for the day or until staffing could be brought up to task. Not only would that have gone a long way toward ensuring the children’s safety, it would have also saved the club $13 million. §