Wave Goodbye to Liability Waiver Enforceability in Wisconsin

On April 30, 2012, the Wisconsin Court of Appeals decided Brooten v. Hickok Rehabilitation Services, LLC, No. 2012AP1940, unpublished slip opinion, further limiting the enforceability of standard liability waivers used by local businesses. The decision made clear that “negligence” or “negligent” are not “magic words rendering an exculpatory clause valid.”

In Brooten, the plaintiff was injured at the defendant’s gym when a weight bench he was using failed, due to a loose mechanism that held the bench in the selected position. The defendant required every customer to sign a standard waiver form before using the gym facility and equipment. The full text of the waiver may be read in the Court’s opinion here. The “Waiver and Release of Liability” stated that the participant understood the risks inherent in fitness activities and that participation in such activities could result in injury. Further, the participant acknowledged that the risks and dangers may be caused by the negligence of the gym’s staff, accidents, breaches of contract or other causes, and that the participant assumes all risks and dangers, including the responsibility for any losses or damages, whether or not caused in whole or in part by the negligence or conduct of the gym staff. The waiver also stated that the participant agreed to “release, waive, discharge, hold harmless, defend, and indemnify [the gym] and its [staff] from any and all claims, actions, or losses for bodily injury, property damage, wrongful death, loss of services or otherwise” arising out of the participant’s use of the gym facilities and equipment.

The circuit court granted summary judgment to the defendant, holding that the waiver was enforceable and barred the plaintiff’s claims for common law negligence, safe place and strict liability. The Court of Appeals reversed the judgement, holding that the waiver was void on public policy grounds. The Court reiterated that Wisconsin has always disfavored liability waivers and subjected them to strict scrutiny.

Applying its strict scrutiny analysis, the Appellate Court determined that the exculpatory clause at issue was contrary to public policy for three reasons. First, it was presented on a take-it or leave-it basis with no opportunity to bargain. Second, it was “impermissibly broad and all-inclusive.” Exculpatory clauses in Wisconsin may only release claims for negligence, and cannot preclude claims for reckless or intentional conduct. The Court found that, by its terms, the current waiver extended well beyond negligence to “preclude liability for any harm for any cause under the sun” and, further, required the plaintiff to defend and indemnify the defendant. This was in clear contravention of public policy. Finally, the Court found that the waiver exceeded the contemplation of the parties by burying the “defend and indemnify” language in the middle of the text. The waiver, therefore, did not meet the standard of being clear, unambiguous and unmistakable regarding what is being waived, and did not alert the signer to the nature and significance of what was being signed.

This recent decision echoes past opinions regarding exculpatory clauses and confirms that Wisconsin courts will continue to scrutinize liability waivers closely. Accordingly, to be enforceable under Wisconsin law, waivers need to be narrowly and clearly drafted to fully notify the signatory of the significance of the document and alert him or her to the specific nature of what is being waived. The waiver should be a separate document with its own signature line, should not use excessive legal jargon, and should discuss only the risks associated with the activity and the release from liability due to negligence. The signatory must also be provided with an opportunity to bargain over the terms of the waiver. The text of the waiver itself should provide for the opportunity to bargain or at a minimum demonstrate that the signatory considered bargaining prior to executing the release.

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