- AB5 Blog
Well, welcome everybody. My guest today is Cory Sterling. He's the leader of Conscious Counsel, which is virtually based, I believe in Vancouver. And if I'm getting this wrong Cory, you need to correct me. But he services customers all over the world with help in their legal matters.
And particularly focuses on folks in the yoga, the pilates and the fitness world. Is that a fair introduction Cory? Yeah, that's lovely, thank you John. I started a law firm, three years ago in Vancouver. And then I decided that I wanted to travel and practice law at the same time.
And I also realized that my passions were travel, and basically exercise, health and wellness. So we really started... I wrote a book called The Yoga Law Book, which was experiences that I had gone through with a variety of my clients who were yoga professionals, which applies to pilates and gyms the same way. And we have a lawyer on our roster who's from the state of New York. And we really, really are very, very specific, we probably do about five or six things.
All of which relate around different types of agreements, and our clients, our studio owners or self practitioners who are professionals either with pilates or with fitness or with yoga. And we just really work on getting them excellent, excellent documents, and at the same time staying up to date with the pressing legal issues and the things that our community needs to be aware of. Cool. And thank you Jia for putting in the chat there, the link to Cory's website or his company's website. And, Cory, I assume you're happy for people to contact you if they have questions after our discussions today.
Of course, feel free to connect. I'm a lawyer but I'm also a real person. So you can write me a note and be like, "Hey Cory, that tee looked awesome." Or you could be like, "Hey Cory, I've got a question "about waivers of liability." Whatever it is, I'm chilling here with my puppy Gringo and I would love to connect, so everyone is welcome to reach out. Cool, thank you for that generosity. When we were researching who to connect with, we had a referral to you from several of the people we regularly work with.
So, you come highly recommended to us. I would just like to say, that the questions that we've been getting recently are all somewhat related to the COVID world that we've just come in. But I don't want to limit our discussion to just talking about COVID crisis legal matters, I'd rather that we kind of talked about the whole legal issues of running, either as a sole practitioner or as a studio owner running that studio, running somewhat. So could we just start off about the things that you feel a studio should have in general, in terms of legal agreements, and then we can move on to talking about COVID. I'd be happy to.
And just for everyone who's listening, if a question pops up in your mind, if you just throw it in the chat, and I know I'm sure that there's a time where we'll be able to address it. But I want-- What I-- The reason why I also love doing this, in addition to being exposed to new communities and sharing information, is that this is a great opportunity to ask a question that maybe you wouldn't have access to, for someone to answer it. So I'm very, very happy to do that. And I want everyone to benefit and learn as much as possible. So, I would start off by saying, if the question is...
I think the question should be this, what relationships do we have as fitness professionals? Because I take a very, very practical approach to the law. And what I've seen is that a lot of people have ideas of what they think the law is, and what it should be, and getting sued, and being in front of a judge, and Jack Nicholson, and all of these things and suits. But in reality law is really about the communication of expectations in written documents. And what I would encourage everyone to do is, the way that you know what documents you need for your particular business either as a sole practitioner, or if you own a studio or if you have a franchise, is that you want to look at the different relationships that you have in your business, and who you have those relationships with.
And within each relationship, you wanna be communicating openly and honestly what your expectations are from that particular relationship. And if that relationship has some particular nuances which are related to the law, then you wanna make sure that you are abiding by what those provisions are. So as an example, I think probably the relationships that are most common or ubiquitous to all of us would be, firstly a relationship with our clients. So, do we have a written agreement with our clients? What does that agreement say?
What are the terms, termination, cancellation, AutoPay? Those sorts of questions. Additionally with our clients, we're gonna want our clients to sign a waiver of liability, which is a really important document that we'll be able to get into. And with our clients, there really isn't that much more that... What we're expecting from them is for them to pay us and what they're expecting from us, is for us to provide the services.
And you sort of just want to explore all of the questions related to that. Another really, really important document, in the event that you're not practicing out of your home, is you've likely either signed a lease or a subletting agreement from another space. And especially with everything that's transpired in the last bit, we've seen a real wave of questions and uncertainty around people's leases, because at least normally is a 45 page document that you'd have to pay a lawyer three hours to review and you don't understand anything. And all of it is written in favor of the landlord. And so what we try to do is bring clarity to the important issues around leases.
But that's another relationship that you'll have, it's gonna be the physical space of where you provide the services. If you have a team or staff, the first logical question is, are they contractors? Or are they employees? And then within that particular relationship, what are the expectations that you, that we have in working together? What about cancellations?
What about subs? What about uniform? What about the way the services are provided? And I think as a starter, I think that's a very, very safe area to just approach, for everyone to consider the different relationships that they have. And within those relationships, how can I communicate openly and honestly what my expectations are?
And the last thing I'll say just about this is, we have a lot of clients. So we've worked with hundreds of clients all over the world in this particular space. What I've observed as a lawyer who's brought in sometimes before, to draft the agreements, to make sure that the relationship is on the right path, or who's brought in afterwards, once an issue arises. The biggest observation I will have is, the better you can be communicating openly and honestly upfront, and letting people know what type of relationship you are trying to make, as you begin the relationship, the less amount of problems you will have down the road. Thank you.
So your advice is to get involved early, rather than trying to... Involve your lawyer or your legal counsel early rather than later. There's a story that I often tell which was... It was very impactful for me. And my first day of being a lawyer, I was working at a big law firm in Vancouver.
The day after I got called to the bar and officially I was a lawyer, I met with one of my mentors, and he told me, he's like, "Hey Cory, congratulations. "I'm excited to have as a lawyer, "I wanna tell you a really important lesson." And what he said to me is, "You're going to do a lot of things for your clients, "there's gonna be surprises, "there's gonna be things that you don't expect, "but the one piece of advice "you're gonna wanna give all of them is, "they can pay you now or they can pay you later." And what he means by that is, by paying now it's the acceptance of a business owner, of an entrepreneur, of a professional, to understand that growing your business, inevitably, you're going to have to deal with the law. If you wanna grow your business and support yourself and build a community, it's impossible to do so without adherence to the appropriate legal rules. And what he shared with me and what I'm trying to share with everyone now is, the cost of getting three documents to start something, to start your business, might be something like $1400. And at the time that you're spending $1400 you think, "Oh my god, I could be using this on paying rent "or Facebook ads, or Instagram posts, "or social media manager, or new equipment, "or all of these things." But the moment that an issue arises as a result of you not having the proper documentation in place, and we'll come to this when we talk about waivers specifically.
You're going to realize you're going to pay 10 X what the cost of the original documents were, plus the stress, plus the crying, plus the not sleeping, whatever. I don't like those stuff, I don't want to focus on those things. But yes, to answer your question, it's very important to be proactive. At Conscious Counsel, we practice proactive law instead of reactive law. And the reason why I wrote The Yoga Law Book is I just saw everyone making the exact same mistakes.
And I've also made an online course which we're gonna be releasing soon. And the reason why I do these things, it's like, it's not so hard to grasp the main concepts and I understand that not everyone's a lawyer and may not be passionate about this, even though we make the experience incredibly fun. But the important concept to grasp is, okay, I wanna be growing my business, I want this to support me, and as such I need to be proactive with the appropriate legal documents. Right. Is your Yoga Law Book, is that pretty much applicable to pilates studios as well?
It would be. When I wrote the book regrettably, I'd never done pilates. And now I'm a big, big pilates fiend. Pilates is... Ask anyone on the team, the only time of the day that is non-negotiable is three to 4:00 p.m.
when I'm in pilates. Like, don't mess with me when I'm in pilates, but, they're the same lessons. The topics that the book covers are, choosing between being a sole proprietor, or an LLC, or incorporating a company, what should be in a waiver of liability, what should be in a service agreement, operating a business online and the things that you need to know when doing that. So it's really for health and wellness professionals, but at the time I was practicing so much yoga and that was my community, that the book is called The Yoga Law Book. Great, thank you very much.
Chan Jia has put a link in the chat there, if people would like to look at the book, and it's... Hopefully it helps folks. Could we talk a little bit about, what do you think people need to be thinking about now that we're in this COVID world. So let's assume that before COVID, they had done their legal work, they have a good set of agreements, With COVID coming along, what do you think people should do in addition? I think that my belief, the single biggest risk to business owners during COVID is that the majority of their insurance policies will not cover them for communicable diseases.
And when it comes to negligence and negligence is a legal term which basically means, messing up or meaning that you should have provided a certain level of care protection to someone, and you didn't meet that standard and asks that you are legally responsible. For however long in our industry people always relied on their insurance for that. So they would say, "Okay, if there's a slip and fall "or if there's this or if there's that, "it's okay because I've got my insurance." And like we work with a company called beYogi, we love beYogi, I love insurance. But the thing that keeps me up at night is that insurance policies are not covering specifically for COVID. So the first thing at this point, you just have to think, "Okay, my assets are at risk." All of the time that I've gone in just know the perfect storm, in some ways could be brewing.
So I think being aware of that, and, as a result of that, there's never been a more important time to make sure that specifically your waiver of liability, covers you and specifically covers COVID, So, in working with pilates clients and with yoga clients, we sort of saw three waves of legal needs that have just sort of came after each other. The first was, to answer your question about legal needs of operating online. The first is that now people are streaming their classes, or recording content and making videos on demand. So, when that happens, there are certain implications that needs to be communicated because the activities that you're doing, and the risks of those activities are now different. And I'll speak to that in reference to two different agreements.
So I'm gonna speak to that about the waiver of liability and I'll speak to that about the service agreement. And John, if you wanna interrupt me at any time if anything's unclear, you just let me know. In all of the research that we've done about waivers of liability across a variety of jurisdictions, we always found that the ones that got challenged or were upheld to be null and void and would not apply, therefore not providing the business owner with the protection, were ones that were ambiguously or not clearly drafted. And just to take that a little bit deeper, the next, when we say not clearly drafted, we really mean that the activities that the participants are participating in, and the risks of those activities were not communicated clearly enough. And that's the risk of downloading an agreement that you're not sure about.
Even if it just says like, "Oh, doing pilates." Maybe you have to be more specific about, body-weight exercises and using the ring and using the Swiss balls and using all of the different tools that you have. So the biggest issue with operating online is that, everyone was using waivers, you come into the studio or you go to your teachers house and sign it, and there was nothing in that agreement that mentioned anything about online practice. Which I can tell you because I've been hired in the past to challenge waivers and I've been hired in the past to defend waivers. So I've sat on both sides of the fence. The first thing that I would do if someone got injured by practicing online, the first thing I would do is go to the waiver of liability, see that most likely that person hadn't updated their particular waiver, and then as a result, challenge on those basis saying, "You didn't clearly communicate to my client, "therefore, "they didn't know the risks of the activities "they were participating in.
"Therefore, the waiver does not apply. "Therefore, we are entitled to a particular claim." That's the big change that happened with waivers. When it came to service agreements, the biggest issue we saw had to do with membership agreements, or what we call like either membership for a studio or a service agreement for a one on one client. And what the problem was is, those membership agreements, only describe the services being provided as being in studio services, right? So you come to the studio, you get an unlimited pass or you get 10 passes, and then just like suddenly overnight, everyone's switching having online classes and videos on demand and however they're doing it and how everything's changing, but the service agreements stayed the same.
So, the argument, the legal argument from a lot of clients who wanted to break their agreements without having to pay, so normally it says, you must give one month notice. And when you've got a handful of clients, it does make a difference that particular month. Everyone was saying, actually, you're not able to provide the services, therefore, you are not allowed to be charging me this money because you're not performing under the agreement. As such, I'm allowed to cancel and I get a chargeback from the credit card company immediately. Does that make sense?
Yep, it does. So, is that what you saw happen a lot, that those membership agreements were terminated immediately? Yes. And in-- It's so interesting, because as a lawyer, my clients will often say to me, "What is the right thing to do? "What is fair?" So as an example, when all of this was happening, I'll never forget, I had a client who operates a pilates studio in the state of Utah.
And she had a three month protection from termination, so she said, "Members have to pay this, "you have to provide 90 days notice to terminate." And she... I remember, she was asking me, she's like, "Is this fair? "Can I do this? "Is it right?" And I was like, "You have your own moral compass. "This is your relationship." Coming back to relationships.
"You can choose." And what she said right away is like, "I'm giving everyone, "I'm allowing everyone to terminate immediately "if they want to." And I was like, "Okay, cool, I get that." That's one end of the spectrum. On the other end of the spectrum what I saw was, a lot of clients, studio owners fighting tooth and nail to keep every member paying as possible and legally. So you can see sort of like behind the scenes, what would happen was these people terminated their agreement outside the terms of a studio membership agreement or the client services agreement. And they called their credit card company and said, "Hey, I was charged for this amount "from this particular period of time. "The studio closed on this date, "therefore give me all of my money back." And the credit card companies are siding with the credit card holders and not with the studio owners.
So I look like... I've been through this dance before, so I was hired by a lot of people, having conversations, understanding in what situations a credit card company would allow a chargeback or not. Cool, and mostly the credit card holder won those disputes? Yes. And then...
And so now this is how law evolves, especially in within such a short timeframe. By doing the research of speaking with them and understanding what worked and what didn't work and on what grounds they would allow something and what they wouldn't, we knew to modify our agreements accordingly. So just as an example, I mean, like here a very, very simple practical tip that everyone who's listening can implement into the services agreements that they have if they've drafted their own, is describing the services that you provide as being both online and in person. Because that nullifies the claim. The claim comes under consumer protection laws.
And consumer protection laws say, "We're not gonna let a company get away "with taking someone's money, "if they're not able to actually perform the service." And John, in being a lawyer for all of these years, what I've learned is like sometimes it's as simple of a change, as modifying the scope of services that are provided by the studio or by the teacher, that it negates the entire claim, the whole process of fighting and the energy and instead like, now being like... By having the legal in place, people are able to know they have confidence with their documents and like focus on building your community and focus on doing the important things to get your business up and running again and rebuilding basically. We had some... Thank you for that. We had some specific questions before the webinar.
One of them was around, "My local laws are not particularly clear "in what I should do. "In terms of when I can reopen my studio, "but it's not clear on whether or not "I should enforce face masks, "time between clients, those types of things." Do you have any advice on people struggling to know, what is the right way to reopen their studio? Yes. I am gonna give advice and then I'm gonna share two practical tips that everyone can implement that should be really, really easy to do and things that you can do to help your business. So this is what I would have to say.
In such an uncertain time where legislation has not-- The government does not have the opportunity to put forth new legislation, federal either in Canada or United States or anywhere in the world and come up with new uniform laws. As a result of that not being in place, they're sort of times of uncertainty and people are unsure about what to do. That being said, the single biggest exposure to liability that a studio owner or that an individual practitioner will have, is that they reopen and they've done something where they have explicitly not followed the rules, right? And when it comes, if we're talking about a negligence claim, as a lawyer, that's a slam dunk, that okay, you knew that you were only allowed to have six people, you had seven, causee, whatever. All of it's there, perfect storm, okay.
So what I would say to everyone is, you live within a county, you live within a municipality, you live within a state, do everything you can to exhaust those particular resources to understand what the rules are. Because my understanding is that much of it is municipality driven, or it's provincial, or it's state driven. And that information will have to be on the governmental website. So that's like, if the question is, where do I get the source? I would say, Facebook is not where it is.
And what your friend down the street is doing is not where it is. As a lawyer, the gold standard is what laws do you have to follow for the jurisdiction that you're in? Go to the governmental website, secondhand information will not do. So that's like, that's the to-do from me. The to-do is like, stop at nothing to use those laws, your greatest exposure to liability is not following the appropriate laws.
The next step after that is, again, and all of this comes from being a lawyer who has challenged businesses and who has defended businesses in the past. When I've challenged, all I want to say is, in addition to understanding the rules, you wanna go out of your way to show how clearly you have followed those particular rules. So, there's a couple of different ways and these are the two practical tips that I'm happy to share. One is that if you have a team and there are other people that you work with, after you've located those rules, have a Zoom meeting online, where you literally read those rules aloud and you record that particular meeting. And all of this just comes back to negligence and adherence that if something happens and if there's a situation that arises, it's so easy for you to show that you were reasonable, that you were proactive, that you did everything in your power to keep everyone as safe as possible.
And make sure again, having a recording of that. Which is something like six months ago, I never ever would have thought to tell my clients like, have a Zoom meeting and keep it recorded, but now it's something that we're doing every single day, including the present moment. In addition to that, I think it's a really, really good practice too, in the space where you're going to be opening and offering the services, print and post these rules. Have them at the entrance, maybe have them in the locker room. Have them, just have them out.
Because again, you're going... If someone, God forbid, if someone is going to contract something, a communicable disease in your space, all of it will hinge on how either prepared you were or how unprepared you were. And telling your whole team, right? That shows that you really cared and that everyone on your team knew what they had to do, and posting in a public space, you knew that everyone who's coming into the space knew. And so those are the two practical tips and like to wrap all of it with a bow together, making sure that your documents legally bind people to that.
So if you have a studio membership agreement, hey, you understand that we have rules, by signing this and entering our space, you agreed to adhere to the rules. And legally that's like... There's really, there's not much more that you can do from a legal perspective. So definitely update the waiver, so that when people come in, there's a COVID supplement, is that the structure you'd suggest? Yes, 100%.
And what we've also been doing is, we call it a COVID release. We also have been updating clients employment agreements, contractor agreements and... No, just employment agreements, contractor agreements, and student waivers to have COVID releases. Just a quick point on the employee/contractor relationship, something that we saw coming up. And the interesting thing John, about this time is that none of it is coming from a textbook, all of it is coming from the stories and the challenges that we hear from clients.
So the way that our business has changed in the way we operate is that it used to be like, "Oh, this is the law and this case says this "and these are the things that you have to do." Whereas now it's like, because things are changing so quickly, one studio will raise an issue, and then as a team we'll think about it. And then like the next day another studio will send the same issue, And we're like, ""Okay, this is the need that people have. "This is what has to be addressed." And I was speaking about contractors and employees. The importance of a voluntary return to work agreement, provision, recording, whatever it is, the major, major issue that you want to avoid is someone feeling that they're obligated to come back to work, maybe because everyone else is, or whatever it is. And then something goes wrong, and then whatever argument they could make saying, "Oh, you know what?
"I didn't really wanna come in "but they told me I would lose my job." or "I felt I would lose my job if I didn't." And just updating those current... Those agreements to have something that says, "I agree that I'm coming back to work voluntarily. "This is my choice." And then also having a COVID release. And this is what we're doing to protect business owners. Do you think it's worth sharing your kind of operating procedures?
Like this is how we operate, maybe put it on the website. 100%. And it's very interesting that you shared that because we've been getting increasing work now with salons, beauty salons and spas and massage therapists. And the way that they offer their services that have changed completely and our recommendation to them is, post new procedures of how things operate and share that with the community and have that accessible. And that's just another step of what people can do to coming back to the root of this, communicating openly and honestly.
If you're coming to pilates, you're gonna have to bring your own towel, you're gonna have to bring your own mask, maybe you're gonna have to wear gloves. Again, find out the municipal laws, and make sure you're in adherence, listen to your own personal moral compass of what you feel comfortable with. And use all of those things to share with people, so they understand exactly how to act and also so that they have a choice to come. I think something that would really stink is that if someone, wasn't aware of what it's going to be like, and its the way the services are provided that have changed dramatically. I would rather that person just didn't come in the first place, instead of being disappointed and having a negative experience with our services.
Yeah, I agree. People should understand the world is not the same, your pilates class will not be identical to the way it was before. So I'm a big fan of over communicating and people can make their own decisions. Yes. Over communicating, I think that's a fine line.
But again, just the simplistic thing is communicating expectations openly and honestly. And what that does, it creates a respectful relationship where people get to choose, right? You get to choose. You told me exactly how the classes are gonna operate, maybe there's some exercises that I used to do that I can't do now. And then people get to decide.
And that's like... Yeah, that's love. Love is respect and communication. Alright. Do you think you will see lawsuits that, I went to a pilates studio, I caught COVID there because they were negligent, and I need to be compensated?
Yes. I believe... I don't know how many lawsuits you're going to see probably because the courts are so backed up. And when anything settles privately, it's never publicized. But I think...
My belief is in a litigious society like the United States. It's like it's crash season. That's a terrible thing to say, but I'm sorry, that's my belief. Also, just in a practical aspect of explaining how the law operates. A lot of people always think lawsuit and going to court and getting sued and winning or losing is how it goes.
Everything really happens in posturing during the negotiation. So the demand letter being sent, someone saying, "You know this that my client was here, "they contract--" God forbid, I hate talking about this, but whatever. "My client contracted this at your studio." The response from the other lawyer is always going to be to show like, this is the waiver, this is the student agreement, these are all the things that you signed, you do not have a case, you cannot bring a case against us. We're praying for you, we hope that you recover. But everything really happens in jockeying in negotiation.
And it only really goes from a demand letter and to filing a suit, if you were in such a poor position during the negotiation phase. So people should expect to be challenged and they need to have all of those documents well written and available to share. I would never say to someone that you should expect to be challenged. I'm like, I'm a law of attraction guy till the end. So I'm like, I'm super positive.
But I'm super positive I only want to attract wonderful, amazing, positive, great things for me in my business. That being said, I think the current climate produces a foreseeable situation where this issue could arise. And because so much has changed, I believe that people's legal documents should change as well. So it's probably a good time to have a... That full on review of every document you have and just make sure everything's there.
Check your records, do you have everything signed? Have those clients actually signed the waiver? Is that your thoughts? Yeah, I think it's very interesting that you phrase it that way. Because, in other in other discussions that I've led, what I've said to people is, this is the ideal time to revisit all of your relationships.
And just like this specific area of law is that... That I was dealing with a lot before all of this was the contractor employee distinction specifically in California, where a new law came into place. Now, anyone who provides the service, which is the same service of the business is automatically deemed an employee. And a lot of my clients were like, "Oh, well, I wanted to switch from contractor to employee, "but I wasn't sure." And like, the thing about what's happened recently, it's like everyone has been jolted into action. And because so much has changed, i.e. the way that you provide the services, there's never been a better opportunity for you to ask people to resign agreements.
And just from a simple... And even sometimes there's trepidation from clients who say, "Oh, I really don't want to ask people "to sign things." And I say, speak from your heart. You've endured the challenge of this business of taking it online and having to be shut down for some months, tell people why you need them just to agree to these agreements, or review and read and maybe question these agreements. But you're doing it for the the long term benefit of the investment of your time and your energy. And also for the benefit of having an income to support yourself and your family and continue your practice.
Yeah, I don't think it's an unfair time at all to ask people to resign. The world is not the same. I don't think it's gonna go back to being the same personally, I think its changed forever. I think on that, I will just comment on that. I think there's gonna be more pilates.
Good. Yeah, it's-- And this is the tangent, and Charlotte, who is amazing, she does our community partnership work. She would have told you that this is gonna be my one minute where I talk not about law, but my passion for pilates. I had no idea how incredible and amazing pilates was. And pilates really is an investment in your body for the future.
It's like how was I spending so much time running and lifting weights, when I just should have been doing pilates? Like every time I'm-- I don't know, I've got my legs in the thing, and I'm doing this one, and I'm just like, my hamstrings are so strong, how did I spend so much time not doing pilates? And my prediction is that more and more specifically men and younger men and athletes are going to be taking up pilates, just because it's unbelievable and that's it. Shout out to Joseph. Just, I'm done.
And now I move back to law. Thank you Cory. Thank you so much. We're getting a lot of different questions here. Let me just take some of them that are on the same theme.
People have asked, Madeline's asked. And I'd also encourage everybody, if you put your questions in the Q&A, it's easier for me to manage than putting them in the chat. So I will try and answer in both places. But, is an example of a model addendum for the new waiver, is that available to the public? Or is that something that people should contact you for?
And... So one, that's something that you should contacts us for. That's a service and another product that we sell. But I just want you to know Madeline, that when all of this happens, anyone who who purchased a waiver from Conscious Counsel, which is our firm, we offered them a free tune up. So the first tune up that we offered had to do with practicing online.
And then once it was clear that everyone needed to change as well and add all the COVID related things, that was an additional tune up. And the relationship that we have with our clients, we've got about 157 five star reviews, is like we're a family, I wanna see all of my clients thrive and grow. And we're invested in your success as much as anything else, which is why we were doing... I don't know, however many free tune ups. But it's something that we sell, but it's sort of like once you're in, we'll do everything to make sure you're always have the best practices.
Cool. And I think you indicated earlier that initial relationship with you, was that about $1400? Or was that just-- Well for... The cost for a package that we have, which sets everyone up with all of these things. So the the four main things that that includes is, immediate release, which covers...
If you're recording content of anyone other than yourself or the business owner, you need to make sure that you own the intellectual property rights in what is being recorded. I had an incident which I shared in the book, but an incident where someone had contributed to making some intellectual property in the creation of it, they never signed an agreement around who owns the intellectual property. And then a year later, that person came back after the product had totally skyrocketed, and they said, "Actually, I'm entitled to 50% of this, "because we never signed an agreement "saying that you own it." And, that's a classic pay me now, pay me later story. So the package includes immediate release, a waiver of liability, either an employment agreement or contractor agreement and a studio membership agreement. Great, thank you.
Christine, our friend from Quebec. "How do you see... "How often do you see legal actions against studios "or fitness facilities in Canada?" How often? What I would say is then the number of cases. So you have to understand, to get to a case, someone has to...
One party formally sues another party through the courts, they get to the point of actually getting to trial, after the trial, there's a verdict that is provided and that's public information. And then that's when we would have access to that. There are very, very, very few cases regarding yoga and fitness studios and pilates studios that are published. A result of that is because 90, I think it's 95% of cases, even just for lawsuits that are initiated, settle. Going to court costs a lot, a lot, a lot, a lot of money.
Going to court costs a lot of money and people will only invest in that usually if A, they have a lot of money, and B, usually they are morally... Or, they're morally invested or they're like completely emotionally invested in seeing something going all the way to court. So, and the other thing is what they always say about court is like, on any given day, you can get the wrong judge, who you've invested. If you're getting to court, you've gone through so many hours of legal fees already. If you end up in front of the wrong judge, everything could go against you in a perfect storm and you could get nothing, including paying the other side's costs.
So just to sort of demystify that, the reason why there's not a lot of case law or cases is because it almost always settles before that. That can include settlements with insurance companies, and that can include insurance between the business itself and the complainant. That being said, I get either inquiries for demand letters all the time, or I'm involved in negotiations with either defending a studio or someone who wants to bring an action against the studio, all the time, what I would say is that it's not uncommon. And everything that I've shared today is a result of the experiences that I've gone through. And it comes from a place of hope and love that everyone can take, you know, understand that these are the key issues that need to be addressed, and be proactive in addressing them.
Because as a lawyer, there's no better feeling than being hired by a studio to defend a claim, looking through their waiver of liability, seeing that it's awesome. And then just being like, "Okay, cool. "Like one to two hours at this point." As opposed to them saying, "Oh, I couldn't find the signed copy." Then it's like, "Okay, 10 to 20 hours, "this is how it's gonna go." I hope that helps. So you'd say that the fact Christina's in Canada doesn't... That she still has a significant risk even though Canada is not as litigious as the US?
I did not say the word significant risk. And again, just because I would be wary to categorize it as such. What I would say is that, Canada being a less litigious society, I think there's less risk. I will use the word risk. But what I would say also is that, I've still been hired by Canadian complainants and Canadian studios to address these particular issues.
So by no means is it something that... There's a word I wanted to use and now I can't find it. But you're not shielded from a legal action, as a result of being in Canada, but it just means things like the small claims court limits are different and the awards that you can get are different through civil claims. And as such, it's sometimes, it's less desirable by people to seek that avenue. Cool, thank you.
Gail had a question about her waiver. When she updates her waiver, should she do it as an addendum? Or should she send out the entire new version of the waiver? I would send out an entire new version. Hi Gail, by the way Gail, I would send out a new waiver, and I would make sure that it covers you for online practice and that covers you for COVID-19 as well.
Great, thank you. Just to ask about your services here. Do you sell a legal package that's just for individual instructors who are only teaching online? Do you have something that you... Could you help that?
This is from Elizabeth. Hey Elizabeth. Yes, so when when you're operating only online, the different agreements that a package like that would include. Again, so if every... And I just repeat this because I want this to be a reference point for people when they're thinking about, "Oh, what agreements do I need?" Just think about the relationships that you have.
So if you're operating only online, you're still gonna want a waiver of liability 100%. The other things that you're gonna need are going to be something like a social media disclaimer. And so that's something where it's linked to your website, ideally, you're putting the text on YouTube. If you have a if you have a link tree, you include it in your profile on Instagram. And it's just something to say to people, "Hey, at the beginning of the class, "please read my disclaimer." The challenge of waivers of liability don't work the same way is that, I could just...
And then lastly, a disclaimer for a website usually just speaks to the qualifications that you have, right? So, in the pilates you'd wanna talk about your certification and continuing education in whatever it is that you have. The reason why you wanna have that in place, is in the event that someone gets hurt or an issue arises, they could claim that you misled them, right? I've got a... For example, I'm a student in pilates, but let's say I wanted to show myself doing...
The other thing about pilates is not cause... I don't know the names of any of the exercise, but in yoga all of the asanas have positions. I'm thinking of the one like one leg is here and the other one slides out on the thing, you know what I'm talking about? So, I do. Yeah, does that have a name?
No and by the way. I'm sure it does, and I'm waiting for somebody to put it in the chat for me here. Okay. Anyway, so let's say I post that content of me online doing that, someone who just happens upon that could think, "Oh, this guy's a teacher, and he's teaching me "and I followed him and then I hurt my groin, "and now..." Whatever, this, that or the other.
it's just like a disclaimer's been just communicating openly and honestly about your qualifications. And to wrap... Sorry, just to wrap all that up... I'm sorry, I'm just trying to tackle different legal issues that may be pertinent to different types of practitioners. But yes, we also have packages which would cover a sole practitioner who's operating online.
Cool. I have a couple of questions. Oh my goodness, there's lots of good questions here. Ria just asked, "What's the difference between a lease "and a waiver?" Same thing. That's...
It's just how, what are called... It's a release of liability, which means I'm releasing you from being liable and a waiver of liability, which means I waive my legal rights to bring an action against you. Cool, we're getting to the end of here, so I'm gonna ask these bullet questions, if that's okay. Yeah, let's do it. What if you're only teaching on Zoom and you don't have a website?
If you're only teaching on Zoom, and you don't have a website, I would have people sign a waiver of liability. Question one, are you collecting information from people? If you're not collecting any information from people and they're just hopping on Zoom and paying and whatever your arrangement is, then I would have a waiver of liability and I would try to have a service agreement. If you know the person really well and you don't have any issues with them, a waiver of liability would be sufficient. Great. Thank you so much.
Ria asked, where did I get my T shirt from. It's from Pilates Nerd. And I'll just scoot this down for people who haven't seen it.
And she has some great stuff for women and for men. She has a lot more stuff for women than men but that kind of reflects pilates sadly at the moment. For the moment John, but we're coming in strong, I feel it. (John laughs) What kind of legal agreements and insurance agreements do you recommend for a pilates retreat company? Okay, so retreats are different.
Firstly, let me know when the retreat is. I'm like, I'm drinking the pilates juice, I'm with you, we'll see. I don't know what the travel restrictions in Brazil are right now, but you let me know and I'm like, I'm into a pilates retreat. That being said, retreats are different because there's a lot more... There's a lot of things happening, it's really simple when someone just comes to your studio.
Go ahead. It's in Costa Rica at the end of September. Okay, juicy, juicy, thank you and noted. Waivers for a retreat are different because the activities that people are doing with you and the time that they are with you and what you're responsible for, are different than just the pure practice of pilates. So an example of the things in Costa Rica, which sounds super rad, you're probably gonna be doing something in the rain forest, you're probably gonna be surfing, you're probably gonna be zip lining, you're probably gonna be doing all the typical Costa Rica's things.
And you're gonna wanna include... Remember, remember what I said about waivers, it comes down to activities and risks. So you're gonna wanna be able to have a document that communicates what people are doing with you, what the risks of doing that are and then have them release you of everything. As an example, if you're going to be doing hiking and the waiver doesn't cover hiking, and someone gets injured on a hike led by the retreat, that sucks. And that's why you wanna just, you know, sort of write down all the things that you have.
The other things related to retreats, and it's so refreshing and I'm optimistic to hear a question about retreats because we used to get asked about it all along. But ever since all of this happened, people haven't been traveling, so I'm optimistic we'll return there soon. Retreats are more complex because people are in a foreign country. And they might have to cancel, they might have to leave early, you might have to ask them to leave, this, that or the other. What I will say about retreats in all of our retreat agreements, we have a mandatory travel insurance provision, which is anyone who's coming on the retreat, has to purchase travel insurance, and in doing so, you're covered in the event of like something really, really bad going wrong, you pass it off to travel insurance, they've done it.
But usually refunds, cancellations, and also what we call in our agreements, setting expectations, letting people know what they can expect. I've had clients who run very, very peaceful yoga retreats and someone came there to party and then they didn't contractually have a reason to ask them to leave. So it's just like... Yeah, as again, sorry to repeat over and over again, but how can I communicate what my expectations are openly and honestly and list as much as possible? Fantastic, thank you.
Hopefully that helped Kate. This was a question that certainly here in California, we've heard a lot about. This has to do with contractor employee relationships for teachers working in a pilates studio. And just for the world here, there was a piece of legislation passed here in California effective the first of January called AB-5. Which was about clarifying when you're a contractor and when you're an employee.
So California has its own unique set of laws. And many states in the US have also got similar laws. Hey Cory, can you talk a little bit about that employee contractor difference, particularly in the US context? Definitely. So California, and I also believe Connecticut, it's not even a question.
So if it's a pilates studio and the service that you provide is teaching pilates you are at law, you are an employee, that's it, full stop. There's a lot of pushback, a lot of like... I've got some clients who've written letters to legislation to try to modify it, but that's the reality you are an employee, sort of deal with it and if you're the studio owner, it sucks because it's more expensive for you. But the... And if you are a contractor who wants to remain a contractor, it's really difficult for you.
Other states like Florida, that I dealt... I've dealt with clients in Florida and I believe in Georgia, there the line is like is clear. And to make it as simple as possible, the distinction between an employee and contractor has entirely to do with the amount of control that you have over the way the services that are provided. And even in the past two weeks, I've drafted a lot of employment agreements, I've drafted a handful of contractor agreements, and the biggest mistake that I see people making is not being informed on the difference. And they'll be like, "Oh, well, they send me an invoice, "So they're a contractor." And I'm just like, "It is way more complex than that." It's really about how the services are provided and how much control you have over the way they're providing the services.
And I will take this moment just to share that, a lot of clients who before were like, "Contractor all the way. "Totally contractor." Because the way their businesses are changing, they now need to exert more control over the way the services are provided, and as such, they're voluntarily switching to an employment method, because they want to tell someone, you have to work the desk, you have to clean, you have to show up at this time, you have to stay until this time, you have to do all of these things. Whereas if you have a contractor, the idea is that a contractor is someone who operates their own business. So think of your plumber, as a contractor, you need the person to perform the service, they come over, they don't really always tell you when they're gonna come. They have their own equipment, they're not...
You're not telling them how they're supposed to be doing the plumbing, they know all these things, because they're a professional. But now it's sort of... Yeah, I can't even think of a scenario where you'd want the plumber to be an employee. But sticking with the distinction, now what's happening is because the operation of the business is different, and it's not like just come in and le-- Like come in, come out and teach your class, because people want more control now, and we see them switching more to employees. And the last thing that I'll just say on this is, the biggest risk is in the event of an audit, or if someone reports you to Fair Practices or you know, better practices bureau, the chance...
The fine for a misclassification between a contractor and employee can be very serious. Also, if they look at your business over a variety of years, and they decide that everyone was always employees, but you always treated them like contractors, they can retroactively, retrospectively, excuse me, charge you what you should have been paying plus interest for unpaid taxes. So it's very, very serious, and... Yeah, and that's a real thing. The other thing in this is an increasing desire from pilates studio owners to really direct the work of that person, because they don't want to have any risks around COVID on top of all the other things that existed before.
So don't ask the question of whether or not the trend away from contractors is gonna continue, my view is it is. I think we're gonna see more and more pilates teachers as employees. I agree with you. I also think in California in the next two years they'll change something, they'll change to something. Because I've worked with a lot of clients where, to put it basically, it really sucked, and it was really unfair the the additional costs they had to incur for someone who teaches yoga once or twice a week.
And it's forced them to rethink their model, they're compliant at the time being, but I think there was enough pushback and uncertainty in California that in two years we'll probably see something new. Okay, so very complicated, it's gonna be on our ballot in the fall, assuming we have an election and all of that stuff to talk about changing. 'Cause there's a lot of people that are Uber drivers or Lyft drivers, that weren't over the moon about this. Teresa has-- This is my last question here buddy. Teresa, "Do you offer services to create an LLC?" No.
Teresa, we love you we wanna help. Unless... What I would say is like, if you really have no... We can, we've done it for clients before. My philosophy about business is focus on a couple of things and be really well informed and do great work in that.
Feel free to send me a note if you need help. I hate pushing people to a service like Legal Zoom where you're completely anonymous and have no relationship. So if you have nowhere else to turn, shoot me a note and we can see if we can do something. But we're really in the business of drafting hard leading agreements that are head on and deal directly with the issues that people need for their plates businesses today. Cool.
Yeah, when we... And I've started some of my businesses, I've also used Legal Zoom, its very anonymous, very cheap, but those kind of standard things they can create for you. Okay, this is my final question here. Does anybody know why Cory has five stars? And Cory you mustn't answer this yet.
But why are there five stars over here? And if you can put that in the chat first, we have a little prize for you. This is a last second thing, and if you don't get it in a couple of minutes, we're gonna close the competition and I'm gonna tell you why there's five stars there. But Cory, do you have any last pieces of advice for our audience today? I love pilates, so I'm stoked to meet all of you guys.
And, I'm super passionate about it. In terms of the law of what's happening is real. Everyone's businesses have changed, the way that we conduct businesses have changed. So I would encourage people to embrace it and use this as an opportunity. Focus on the positive aspects of how you can now pivot your business to make it better and use your agreements to help you pivot your business.
We're here to help our team, obviously I'm super passionate. And I love you all. Keep more pilates. I have to give a shout out to Heather Erdmann, I don't know if she's listening. But she was like my first pilates client and she and I connected on LinkedIn.
And I'll never forget her name just says, "Heather Erdmann, pilates changes lives." And I was like, "Whoa, that's juicy." So I Love you guys and thanks for your time today. I hope this was helpful, feel free to reach out to us. Fantastic Cory. Well, I'm just looking at the things, I think Deborah Grabelle got the closest to there. This is Brazil, and if I'm wrong Cory, I'm gonna be very embarrassed here, and they won the World Cup five times.
That's hence the five stars. What happened in 1966 John? We don't wanna go there, but England won. No, I love it. I've supported the three lions in football my whole life, so I'm on your team for this.
I would just say, thank you so much Cory. I really wish I could drive over and have a beer with you or whatever your choice is. And hopefully our paths will cross in the future sometime. So its a pleasure talking to you. Let's make it a Mati.
You're always welcome and you go on your road trip, and who knows? Stranger things have happened. I know. It's a small world, I'm always surprised about that. And for all those people that attended, thank you so much.
And, hopefully if you have questions, you've got Cory's website, you can contact him through that. And I look forward to seeing everybody at the next webinar. Thank you so much everybody. Thank you Cory. Bye guys, ciao, obrigado.