Legal Aspects of Health and Fitness Clubs: a Healthy and Dangerous Industry
| Publication year | 1986 |
| Pages | 1787 |
| Citation | Vol. 15 No. 10 Pg. 1787 |
1986, October, Pg. 1787. Legal Aspects of Health and Fitness Clubs: A Healthy and Dangerous Industry
America is in the midst of a physical fitness craze that has engulfed people from all walks of life---young and old, single and married, athlete and non-athlete, the rich the famous, businesspeople, secretaries, laborers, factory workers, storekeepers, housewives and professionals. American adults are entering commercial health and fitness clubs in unprecedented numbers.
Fitness and health, therefore, has become big business and competition for the fitness dollar has become fierce. Health clubs and fitness centers are now a $5 billion a year industry. An estimated 85 million people exercise in the United States, representing 35 percent of the population. These people spend about $1 billion on consumer exercise equipment a year; $50 million on diet and exercise books; $1 billion on athletic footware; $8 billion on active wear; and $5 billion on health food and vitamins. Moreover, sports medicine has become a $2 billion a year specialty.(fn1)
Within the booming health and fitness club industry, Denver is considered to be one of the hottest places for adult fitness in the country. In fact, in and around Denver there are more than 200 health clubs.(fn2) Health clubs in Colorado as well as around the United States range from specialty health clubs for weight training to complete wellness health and fitness clubs.
The lure of exercise is spurred on by the belief that fitness can help improve an individual's entire lifestyle. As a result, health and fitness clubs are moving toward the total wellness club.(fn3) Such a club includes, in addition to programs for aerobics, swimming, weight training, rac-quetball and tennis, programs on nutrition, diet counselling, sale of vitamins, behavior modification, stress testing, disease prevention, massage therapy, tanning salons, injury rehabilitation, cardiovascular testing and conditioning, exercise prescriptions and health education classes.
One consequence of the current fitness craze has been a nationwide epidemic of injuries. The injuries range from minor aches and pains to severe fractures, broken teeth, strains, heart attacks and paralysis, some of which have led to death. During a recent six-month period, four patrons in Colorado alone died as a result of accidents sustained at health clubs.(fn4) Research studies have found that more than 70 percent of aerobic instructors and 50 percent of the students are injured by aerobic exercise. This is particularly significant in light of statistics indicating that today an estimated 24 million Americans, 90 percent of them women, engage in aerobic exercise.(fn5)
Despite the increase of such injuries, no state has yet passed legislation for the licensing or certification of fitness instructors. Physicians, fitness instructors and health practitioners led by Dr. Marc Rabinoff, a professor of physical education at Metropolitan State College in Denver, recently founded Professionals Against Fitness Fraud ("PAFF"), which is mounting a national campaign intended to pressure the fitness industry into self-regulation. It also plans to push states to develop certification programs for managers and instructors of health and fitness centers.
Often, the establishment of health and fitness clubs involves investing heavily in facilities, equipment and interior decor, leaving scant funds for meeting staffing and management needs. Budgetary limitations can result in the hiring of part-time exercise leaders at minimum hourly wages, with little or no consideration of the staff's training, experience or professional certification.(fn6) Budgetary issues were the subject of a recent lawsuit in Jones v. Crescent City Health & Racquetball Club, a 1986 Louisiana case.(fn7) The plaintiff's membership was terminated when he complained about the management and upkeep of the club. The court held that the member's termination was unlawful and awarded him the value of the membership for two years.
Besides the problems associated with an untrained staff and poor management, the maintenance and design of the facility itself and the equipment provided by the
health club can result in injuries. Many clubs rely on exculpatory clauses in the membership agreement to relieve them of liability for negligent acts or omissions.
In addition to legal problems associated with injuries at health clubs, major legal problems have arisen in connection with club memberships. A case of national interest developed in 1985 when 24-Hour Nautilus Swim and Fitness Centers, one of the largest health club chains in the U.S., filed for bankruptcy, leaving about 150,000 members without a club. These members lost membership fees and membership rights under their contracts. The problems faced by 24-Hour Nautilus included inadequate management, instruction and maintenance.(fn8)
The Consumer Fraud Unit of the Denver District Attorney's Office shows that in 1984 nearly 100 consumer complaints about local health clubs were processed and that twelve local health clubs closed down operations.(fn9) In 1985, in response to the 24-Hour Nautilus case and other club problems, the Colorado legislature amended the Consumer Protection Act(fn10) so that health club patrons would have more protection from sharp and deceptive business practices.
This article presents an overview of some legal problems involving membership, staff and facilities. The last section of the article briefly examines the impact of the July 1, 1986, Colorado legislative enactments on the legal issues involving health and fitness clubs.
Membership problems involve deceptive promotions and sales gimmicks; complaints concerning membership fees, including members' continuing obligation to pay fees despite relocation or demise of the club or disability of the patron; membership rules and regulations; changes in or misrepresentations concerning present or future benefits, programs, activities and facilities; and waiver of liability.
As noted above, the bankruptcy of the 24-Hour Nautilus Centers triggered significant public outrage in Colorado which resulted in legislation enacted June 3, 1985, amending the Colorado Consumer Protection Act"(fn11) CRS §§ 6-1-101, -114 now provide health club patrons with a number of statutory remedies. These include a remedy for deceptive trade practices and false representations and certain rights involving membership contracts.
The amended statute provides that a buyer of a health club membership is entitled to rescind the contract within three business days after receipt by the buyer of a copy of the contract. Failure to provide proper "conspicuous" notice of the rescission right is also defined as a deceptive trade practice. The statute further provides that it is illegal to sell health club memberships, "the actual and financial duration of which" are longer than twenty-four months. Moreover, a membership contract must terminate if the buyer dies, becomes physically disabled, the club location is moved more than five miles away, operation of the club is discontinued or the club is sold resulting in "substantial alteration of the quality of health club services or the nature of benefits."(fn12)
Buyers of pre-opening club memberships are also afforded protection in that the specific date that the club will open for use must be clearly and conspicuously set forth in the membership contract. If the opening is delayed more than sixty days, the buyer is entitled to cancel the membership and to receive a full refund of all payments. All sales receipts of pre-opening club memberships must be escrowed in a separate bank account; in the alternative, a surety must be provided in the amount of $50,000 for repayment of amounts actually paid under pre-opening membership agreements.(fn13)
In addition to these recently enacted statutory protections, club patrons have available to them legal theories based upon common law fraud, misrepresentation, breach of contract and breach of warranty. Many patron complaints deal with the breach of promises relating to future events, such as that membership fees will never be increased or that more and expanded facilities and programs will be provided in the future. However, to recover for a false promise to do a future act, the plaintiff must be able to show that the health club lacked the intent to do the future act at the time the promise was made.
This can be a difficult burden. A case in point involving a promise that membership fees and types of memberships would not change is Chancellors Racquet Club v. Schwartz.(fn14) In this case, the plaintiffs were promised at the time they joined the club that they were getting the lowest possible membership rate and that the membership programs would not be changed. The rates were subsequently lowered and the programs were changed. The plaintiffs brought suit to rescind the contract based on fraud. The appellate court reversed the trial court's rescission of the contract, holding that when the promise was made, it was true. The court found no intent to deceive the plaintiffs at the time they joined the club and, thus, no fraud. Since the promise concerned a future act, the plaintiff would have had to plead and prove that the health club intended to lower the rates or change the membership program at the time it promised there would be no such changes.
Health club rules and regulations may also be the subject of controversy. In...
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