Waivers, Employer/Employees, and Bargaining Position

Waivers, Employer/Employees, and Bargaining Position

By Doyice Cotten

This article is taken from Waivers & Releases of Liability 7th ed. by Doyice and Mary Cotten.

Employers are considered to have a superior bargaining position over employees. For this reason, as a general rule, waivers which employers require employees to sign are generally considered to be in violation of public policy and unenforceable. However, three “sub-categories” under employees will be examined here.

Part-time Employees. Courts have enforced such agreements when the employee is a part-time employee or the livelihood of the person does not depend upon the job. A man working as a race track starter was struck by a car and sued the employer.(Finch v. Andrews, 1993)  The court held that it need not address the public policy because the employee was not subject to economic coercion because he was part-time and his livelihood was not at risk.  In a similar case in South Dakota (Holzer v. Dakota Speedway, Inc., 2000), the court commented that the plaintiff worked at the track as a non-paid volunteer and not as a livelihood.  The court added that no public interest was involved because the waiver was an agreement between individuals and would have little, if any, impact on the general population. In Brown v. Robbins (2007), a waiver signed by a race official working for $50 per night was enforced because the plaintiff worked because he wanted to be near races. There was no unequal bargaining power and both parties mutually accepted what the other was offering. A part-time employee was injured while teaching horseback riding. (Young v. Prancing Horse, Inc., 2005)  She filed suit against her employer but the court upheld the waiver she had signed.

Independent Contractors. Waivers required of an independent contractor by the employer appear to be against public policy.  In a 2006 Connecticut case (Colagiovanni v. New Haven Acquisition Corp., 2006), the court held that the waiver signed by the independent contractor (a newspaper carrier) releasing the party with whom he contracted (the newspaper company) from liability was void as against public policy. The court felt that the circumstances were the same as those when an employer requires an employee to sign a waiver and was characterized by an inequality in bargaining positions. Likewise, in Speedway SuperAmerica v. Erwin (2008), the court held that a waiver/indemnification agreement signed by an independent contractor was against public policy because of the unreasonable terms of the agreement and the inferior bargaining position of the contractor.

Volunteers. As with part-time employees,  a waiver required by an employer of a volunteer seems to be enforceable. In Brown v. Northwoods Animal Shelter (2011), a volunteer was injured after having signed a waiver. The Michigan court enforced the waiver stating that requiring volunteers to sign a hold harmless release does not violate public policy. Here, as with the part-time employee, public policy is not breached, probably because the volunteer does not depend on the position for a livelihood.

Photo Credit: Thanks to Sun Dazed at http://www.flickr.com/photos/sundazed/2643729011/sizes/n/in/photostream/