Canada: Getting Fit… Legally – How To Manage Your Legal Risk As A Fitness Business Owner

Last Updated: May 26 2017
Article by Fiona Brown

It is no surprise that there are many challenges to running a fitness business. One aspect which often troubles fitness business owners is how to go about ensuring compliance with all the different legal requirements that come with having employees and customers. As a client service industry, a fitness business's employees and customers are at the core of what it delivers on a day-to-day basis.

It is also the case that many fitness activities are inherently dangerous – another challenge of running this type of enterprise. It is not surprising that any prudent fitness business owner would want to know how to protect themselves from the downside risks created by their fitness activities.

Fitness business owners in Ontario should therefore be aware of a number of important legal requirements affecting their employees and customers, as well as understand that there are a few steps they can take to protect their business from exposure to liability. Below are some of the key legal points a fitness business should be aware of in this regard.

Non-competition and non-solicitation clauses

Post-employment "restrictive covenants," such as non-competition and non-solicitation clauses, generally attempt to restrict the former employee's ability to compete against the employer or solicit the employer's employees, customers or potential customers.

There are several common situations specific to fitness businesses for which a restrictive covenant might be appropriate. For example, a fitness instructor may decide to leave her current position and start up a new fitness business which provides the same services and targets the same potential customers as her old business. Sometimes this new fitness business might even be next door to the old one! In this case, a non-competition clause may be appropriate.

In other cases, the fitness instructor may leave to go to another already established fitness business. She may also tell all of her clients to follow her there (in other words, she would be hoping to "poach" the customers from her old business). In this instance, a non-solicitation clause may be appropriate to restrain this kind of behaviour.

Canadian courts will enforce non-solicitation clauses if they are reasonable, and will enforce non-competition clauses if they are reasonable and a non-solicitation clause is not sufficient to protect the employer. The factors which go into determining whether a non-competition/non-solicitation clause is "reasonable" are based on the duration, the geographic scope and the scope of the activity covered.

The key point with respect to these kinds of clauses is that a properly drafted non-solicitation/non-competition clause can prevent an employee (or even an independent contractor) from many forms of competition following their departure. This will be important for any fitness business given the highly mobile nature of the fitness marketplace.

Privacy

In Canada, privacy is an ever evolving and complex area which is governed by several different sources of law, including federal and provincial legislation and the common law.

One of the more important pieces of legislation which applies to certain employers is the Personal Information Protection and Electronic Documents Act (PIPEDA). Employers not subject to PIPEDA commonly adhere to its requirements as a best practice.

PIPEDA applies in respect of personal information that the organization collects, uses or discloses in the course of "commercial activities." Under PIPEDA, organizations are required to "... collect, use or disclose personal information only for purposes that a reasonable person would consider are appropriate in the circumstances." The knowledge and consent of the individual are also required for the collection, use or disclosure of personal information, except in certain limited circumstances.

Fitness businesses often wonder whether they can collect certain kinds of information, including photographs of their customers. Such photographs are often uploaded to the Internet and disseminated through Facebook or Twitter, or sent out to others via promotional emails.

A photograph in which a person is identifiable conveys personal information. Compliance in this case would include obtaining the express consent of the individual, and requires the fitness business to limit collection for purposes that a reasonable person would consider appropriate in the circumstances.

Privacy requirements can also be impacted by what occurs beyond Canadian borders. Where electronic data might be, via "cloud computing," processed, used, stored or accessed in, e.g. the United States, fitness businesses should make it clear to individuals that their information may be processed in a foreign country and that it may be accessible to law enforcement and national security authorities of that jurisdiction.

Lastly, fitness businesses should be aware of two common law workplace torts which would potentially give a customer a private right of action. The first is "intrusion on seclusion." This privacy tort is triggered where someone "intentionally intrudes, physically or otherwise, upon the seclusion of another or his private affairs or concerns ... if the invasion would be highly offensive to a reasonable person."

The second privacy tort is "public disclosure of private facts." This tort has only recently been recognized by Canadian courts. Under this tort, one person will be liable to another for invasion of the other's privacy rights if the matter made public or the act of the publication (a) would be highly offensive to a reasonable person; and (b) is not of legitimate concern to the public. This tort has been specifically used in a previous case to find a person liable for posting to the Internet a privately-shared and highly personal intimate video recording of his former partner.

Both torts are concerning for employers because of the doctrine of employer "vicarious liability." In certain circumstances, vicarious liability can apply so as to hold an employer liable for the tortious actions of their employees, which are committed at the workplace. It is therefore possible that in the future, the doctrine of vicarious liability might be applied to hold a fitness business liable for the actions of one of their employees, where during working hours that employee commits the tort of "intrusion on seclusion" or "public disclosure of private facts" against a customer.

A fitness business owner should ask themselves: do I collect "personal information" about our customers or employees? If so, have these individuals provided their consent? Am I using this personal information reasonably? Is the personal information secure? Do I have a "privacy policy" in place? Do I have a policy for cloud computing? Are my employees trained to comply with privacy requirements (including PIPEDA and common law)?

There are many privacy law requirements applicable to businesses in Ontario and a good checklist is the first step in achieving compliance.

Canada's Anti-Spam Legislation (CASL)

The anti-spam legislation that came into force in 2014, known as Canada's Anti-Spam Legislation (CASL), applies to all commercial electronic messages sent by businesses.

Even though businesses might be aware that CASL applies to emails they send out to their customers, they often overlook the fact that CASL may also apply to their posts on social media, including Facebook and Twitter posts. This is because CASL defines a "commercial electronic message" as

"... an electronic message that, having regard to the content of the message, the hyperlinks in the message to content on a website or other database, or the contact information contained in the message, it would be reasonable to conclude has as its purpose, or one of its purposes, to encourage participation in a commercial activity, including an electronic message that ... offers to purchase, sell, barter or lease a product, good or service...."

The very broad definition of "commercial electronic message" means that CASL likely applies to many more business emails, Facebook posts and Twitter "tweets" than one might think.

It is important to know that in order to send a "commercial electronic message," a business generally needs (a) consent, which is either express or implied, and (b) to comply with mandated content/unsubscribe information.

The onus of proving consent remains with the person sending, causing or permitting the sending of the commercial electronic message. Senders of commercial electronic messages must therefore keep a hard copy or electronic record of, among other information: (a) all evidence of express and implied consent (e.g. audio recordings, copies of signed consent forms, completed electronic forms) from consumers who agree to receive CEMs (b) documented methods through which consent was collected (c) policies and procedures regarding CASL compliance, and (d) all unsubscribe requests and resulting actions.

The penalties for non-compliance can be severe. In a case in Quebec, a business was fined $1.1 million in 2015 for sending spam emails to individuals whose email addresses it had found through "scouring" publicly available websites. These emails were found to contravene the CASL provisions because they were sent without the recipient's consent and were sent with a non-complying "unsubscribe" function.

As a result, businesses (and particularly fitness businesses) should ensure that they have the proper CASL compliance measures in place. These may include, among other things, having a properly prepared standard form express consent request, having a consent tracking system in place, and complying with the mandatory identification and unsubscribe requirements. Businesses must also ensure that their staff are properly trained since CASL also imposes "vicarious liability" on employers, meaning that employers may be liable for non-compliance by their employees.

Waivers and Releases

A waiver (also known as a release) is a contractual clause intended to prevent a person who signed the contract from taking legal action, such as suing for personal injuries sustained as a result of participating in a fitness activity.

The importance of waivers and releases is evident when one considers the fact that many fitness activities are inherently dangerous. The validity of a properly executed waiver is of the utmost importance to businesses providing physical activities as it protects them from costly and time-consuming litigation.

The Ontario Court of Appeal has confirmed that if a waiver is correctly drafted, presented and properly executed by the participant, courts will enforce the terms of the release.

On the other hand, having a badly-drafted waiver can potentially lead to serious liability down the road. In a 2014 Ontario case, a participant in a "zip-lining" activity signed a waiver – and even initialled the waiver eight times! However, in this case, the words "Participant Agreement" were in capital letters, but the more important words "(including assumption of risks and agreements of release and liability)" were in small type and the waiver language was only on the last page of the agreement.

There were also other mistakes in the waiver involving typographical errors and the failure to describe the specific legal rights being waived. The court in the zip-lining case found that a full trial was necessary because of the "potentially confusing language" in the waiver. It is almost certain that this trial would be a long and expensive one for the activity provider!

As a "best practice" for having an enforceable waiver or release, a fitness business should ensure a few things. First, it is important that there is "consideration" and "meeting of the minds" when signing the waiver or release. This includes providing the waiver or release before the person engages in the activity and bringing it to the attention of the person. This requirement for bringing it to the person's attention is especially important for standard form ("boilerplate") waivers or releases.

A properly drafted waiver or release must also describe the kind of conduct amounting to negligence, which is intended to be covered. It should also be able to be understood by the person reading it. Lastly, employees who ask participants to sign waivers or releases should receive training in order to ensure that all the foregoing requirements are met when a customer is presented with the waiver to review and sign.

AODA and OHSA Policies

Like other businesses, fitness businesses must comply with the provisions of the Accessibility for Ontarians With Disabilities Act, 2005 (the AODA). The AODA requires that "every provider of goods or services shall establish policies, practices and procedures governing the provision of its goods or services to persons with disabilities...," also known as the "Customer Service Standards."

Fitness businesses must provide training for employees about the provision of goods or services to persons with disabilities. They must also post notices on premises (a) that the documents required under the Customer Service Standards are available upon request, and (b) if there are any temporary disruptions in facilities or services which may affect persons with disabilities.

In addition, fitness businesses are required to comply with the Occupational Health and Safety Act (the OHSA), which includes preparing and reviewing, at least annually, a written occupational health and safety policy, and developing and maintaining a program to implement that policy. Fitness businesses must also post in a conspicuous location in the workplace a copy of the occupational health and safety policy.

Fitness businesses need to be aware that there are new rules for workplace violence and harassment under the AODA. Under these rules, employers must (a) prepare a policy with respect to workplace violence (b) prepare a policy with respect to workplace harassment, and (c) review the policies as often as is necessary, but at least annually.

Both the AODA and the OHSA impose penalties for non-compliance. As such, it is important for fitness businesses to ensure that they are aware of and comply with the applicable legislation, including training their employees to meet these requirements.

Key Takeaways

There are many legal requirements which a fitness business must comply with in Ontario, and many of these extend to the employees and customers of the business. Some of these requirements, such as complying with privacy law obligations or AODA or OHSA policies, exist to protect employees and customers alike, and have serious repercussions for the employer if breached.

In other cases, compliance with the law is not strictly required, but is almost always a "best practice" for fitness businesses looking to limit their liability. A properly drafted waiver or release (to give just one example) is an important part of ensuring that fitness businesses are not exposed to potentially ruinous lawsuits from their customers. Given the downside risks involved, fitness business owners who want to protect themselves in this regard should consider getting appropriate legal advice.

*With assistance from Pavle Levkovic, an articling student at Aird & Berlis LLP.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Fiona Brown
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions