Five Questions For Fall 2020

Sean Callan, Fraternal Law Partners, sean.callan@fraternallaw.com

Greek life faces an uncertain future in the near term.  Fraternal organizations face challenges in every facet of their business including housing, operations, finance, recruitment, charitable giving – the list is endless.  As fraternities and sororities navigate these issues, some questions arise again and again. We answer 5 of the most common questions below.

1. What is our liability for COVID claims?

Some good news here.  We see no basis for any kind of strict liability claim.  In other words, simply because someone gets sick at your chapter house, or at your recruitment event, etc., the organization is not automatically liable.  Rather, COVID liability rests on negligence.

Broadly speaking, a negligence claim requires proof of four elements: (i) duty; (ii) breach of duty; (iii) that the breach of a specific duty is the direct and proximate cause of injury and (iv) damages. 

2. How is a COVID claim likely to play out?

Applying the negligence principles set out above, the duty or standard of care will be established by reference to several sources including CDC guidance, state and local laws and directives, local health department rules and possibly University guidelines.  It is important that Greek leaders be familiar with these rules while doing the best they can to comply with the rules.  Many partners in the Greek community have collected resources with links to, and summaries of, these various source materials.  The insurance and property management professionals are at the forefront of this effort.  The good news – the information is available.

Importantly, a breach of the duty of care does not necessarily equate to negligence.  A plaintiff must also prove that a breach of a specific duty caused harm.  This seems to be a difficult burden in the context of COVID-19.

Here we have an infectious illness that is in community spread.  Proving that a plaintiff became ill from an unsanitized light switch as opposed to going to a class, bar, IM game, party etc. seems nearly impossible.  It is unclear how to successfully prove that a breach of a particular duty in a fraternity house caused illness when you have a disease in community spread.

Looking at the problems with proving negligence, the likelihood of successful suits appears low.  That said, if there is a significant and localized outbreak of cases within a particular chapter house, this analysis would change. 

Moreover, there will be lawsuits, no matter the odds of prevailing.  For that reason alone, Greek leaders would be well served to do their very best to fulfill the duty as established by the CDC and other sources.

3. Should we get waivers from live-in members?

       There are many different opinions on this issue, none of which are wrong.  We have seen different groups approach the issue in different ways.  We discourage waivers at this time and to date, we have seen no reason to change our thoughts. 

       First, it is unlikely that there would be a uniform response to such a request. Some members would sign it.  Some would not.  Some would say “I might sign it but let’s talk about my parking space” (or any other issue on that member’s mind).  If there are different responses, it is unclear how an organization could harmonize those responses.  Different people would almost necessarily have very different deals living in the chapter house.

       Second, a waiver could be viewed as adhesive.  For instance, if you tell a member that she may live in the chapter house per her contract, but only if she signs a waiver, it is unlikely that her decision to do so is knowing and voluntary.

       Third, in some states waivers in a residential housing context are unlawful. Before using a waiver, you should check state law to ensure that such an agreement is even allowed.

       Finally, you may well find your waiver being used against you in court.  Expect plaintiffs to use the waiver to demonstrate that the organization understood that the situation was dangerous yet brought students back to the chapter house anyway.  The message in a waiver is that “we think that we are doing something that might cause you harm.”  An ineffective waiver could be very powerful evidence for a plaintiff.

4. What should we do going forward?

       Part of the activities in the Fall will be to gather housing contracts for Fall 2021. This may be challenging.  However, there are a few things that can be incorporated into new contracts to help address the issues encountered in 2020.

One provision to consider is an assumption of risk. This could involve a description of COVID-19 along with a discussion that the illness is widely distributed, easily spread, and that attending college while living in a chapter house necessarily exposes the member to a risk of illness.  The member then agrees to assume that risk.  The message here is that “this risk exists, it has been explained to me and I accept that risk.”  This message is much different than a waiver.

A second provision to consider is a mathematical calculation of discounts on room and board fees (if any) if an early closing occurs.  Whether and how much to refund students was a difficult issue in the Spring of 2020.  Since the cost of operating a chapter house is not necessarily linear, a pro-rata refund would result in losses for most chapter houses. In most cases, any agreed upon refund formula should be front loaded to capture the fixed costs of chapter house operation.  While most contracts for Fall 2020 likewise will not contain any refund provision for the most part, this can be changed going forward.

       Third, consider a provision setting parameters for quarantine and generally what happens if a member falls ill.  Perhaps the agreement might provide that the member is expected to leave the facility and that during such absence, all fees would be waived.  Such a provision would be difficult or impossible to enforce if needed, but simply having the provision would likely help cajole voluntary compliance.

       Fourth, you may consider a special provision for handling COVID-19.  As we learned in the Spring, a pandemic and the fear that comes with a pandemic does not fit neatly into a force majeure clause. Creative drafting could capture the contractual nuances of dealing with this illness.

       These are examples of the types of issues we will surely address in the 2021 contracts; there will likely be others.  We know with certainty that all housing agreements should be examined with a new perspective.

5. My live-in members for Fall want out; what can we do?

We have seen all manner of reasons given for escaping housing agreements for the Fall.  Most of them relate in some way to fears that a member would infect family members if the member became ill.  No matter the reason given, it is important to keep in mind what the member is doing – this is an attempt to escape contractual obligations to pay money. It’s all about the money!!!

       No housing agreement requiresa member to live in a chapter house.  The central agreement in a housing contract is that the house corporation provides space in the chapter house, while the member pays a fee.  Actual residence in the chapter house is not required.  In other words – the member is free to live anywhere.

       So, the question presented is really “does the provided excuse rise to a level sufficient to allow this member to escape a contractual obligation to pay?” The answer in nearly all cases is no.^[1] 

       There are very limited exceptions to this general rule.  While fraternities and sororities are exempt from the Federal ADA, they are not exempt from the Fair Housing Act.  Likewise, there may be state level versions of the ADA that do apply to Greek housing.  Given that at least some of these kinds of laws apply to Greek housing, the house corporation must be vigilant to determine if any member raises an issue that could be a disabilityunder the law.  If so – then there may be grounds to avoid the contract and that situation must be examined meticulously.

       These claims are few.  Most of the COVID related excuses do to rise to this level and could be legally denied. Again – this is a dispute about money; it’s not a dispute about where to live.  Every member can live wherever they want.  The question is whether they are going to meet their contractual obligations. The legal answer, in most case, is that they must.     

[1]I would note that even death does not allow one to escape a lease or a mortgage – the obligation to pay follows your estate.