Operating an Equine Facility: Should you Consult a Lawyer?

Equine related agreements can be broken down into a few main categories: (1) waivers and releases; (2) employment; (3) boarding, care and training; (4) sales and leases; (5) breeding; and (6) ownership agreements.  For purposes of this article, I am going to discuss waivers and releases and employment.  

Liability Waivers & Release

As a farm owner, another critical document that should be considered is a liability waiver. Also referred to as a release or hold harmless agreement.  Almost every equine facility I have ever visited has required a liability release be completed prior to engaging in any equine related activities, including spectating.  

What is a liability waiver?  It is a legal document that informs a person that is seeking to participate in an equine-related activity that there are certain inherent risks associated with participation in equine activities. 

Who should have one?  All individuals and businesses that offer any equine related services or activities, as well as private farm owners not operating a business, should require that all guests (this includes friends and family), clients, employees and spectators sign a properly drafted waiver.  

Why should you have one?  Equine-related activities are dangerous, you’re often dealing with a temperamental 1,000 – 1,800-pound animal that, when not trying to injure itself, is often attempting to injure you.  Almost every state has enacted some form of an equine activity statute to protect equine professionals and sponsors in the industry from liabilities for injury or death of a participant, but those statutes are not always exhaustive. A properly drafted waiver will provide additional protections and risk management.  

How do they work?  A waiver clearly states that the signing party is aware of and is assuming the inherent risks associated with participating in equine-related activities.  The enforceability of a waiver hinges on the specific language of the waiver . . . the more detailed the waiver, the better.  Waivers should contain clear language that identifies the parties, the activities covered, the risks and cite the specific waiver language in large conspicuous text and most importantly a waiver must include signature blocks for each participant or guardian to sign.  A waiver can also include headgear requirements and health insurance requirements.  

Every state has different requirements and statutory language so it is important to reach out to a knowledgeable attorney to make sure your release complies with your states individual laws.  A properly drafted waiver that complies with state law often results in a complete dismissal of an injury related lawsuit.  It is important to note that a properly drafted waiver will not bar a lawsuit from being filed, it will act as a defense to a lawsuit. 

In addition to a properly drafted waiver, many states, via their equine activity liability laws, require farm owners to post a warning sign stating that equine activity sponsor or professionals are not liable for injury or death to participants due to the inherent risk of equine activities.  Keep in mind each state has different requirements for the signage, including size, color and specific wording that must be included.

Depending on the services being offered, another agreement to consider is one waiving liability for injuries a horse may incur while on a farm owners’ property.  This type of release is another risk management device that limits the liability of the farm owner if a horse is injured while under the care, training or supervision of the facility. This type of release may be a standalone agreement or be included in a boarding or training agreement.  Similar to the human waiver, this agreement should clearly identify the parties, the risks, and what is being waived.  

Employment

As a farm owner, you will likely find yourself hiring help at some point, whether it’s someone occasionally picking stalls, clipping a horse, providing full grooming services, providing training services, exercising horses, a farrier… the list goes on.   As is the case in any other industry, equine industry workers may be classified as employees or as independent contractors depending on the kind of work that worker does and how much direction is given.  The relationship between an employer and workers is governed by both federal and state law.  Understanding how a worker will be classified is important because it impacts an employer’s responsibilities and obligations with regard to that worker. Under the Fair Labor Standards Act defines the term “employ” is broadly defined, therefore the default position is that someone who is permitted to work is an employee.  Employees have numerous rights relating to how they are paid, when they are paid, workers compensation, health care benefits, unemployment, medical leave and non-discrimination rights.  For this reason, the Internal Revenue Service and the U.S. Department of Labor are often concerned about the misclassification of employees as independent contractors.   

The classification of a worker is not based on how the employer refers to that worker or what a contract says, classification is based on the relationship between the employer and the worker.  The more control an employer exerts over a worker, the more likely that worker is an employee versus an independent contractor.  While courts and governmental agencies across the country use different tests to analyze the relationship between employer and worker, the most widely used is the Common Law Agency test.  The Common Law Agency Test is utilized by the Employee Retirement Income Security Act, the Americans with Disabilities Act, the Civil Rights Act and the Age Discrimination in Employment Act.  The Wages and Fair Labor Standards Act, Family and Medical Leave Act and Department of Labor utilize the six factor Economic Realities Test, the Immigration Control and Reform Act utilizes its own seven factor test and the Internal Revenue Service also utilizes its own twenty factor test.  No matter which test is applied, the most important thing comes down to how much control the employer has over when and how the worker performs the tasks at hand and how that worker is compensated.  In the equine industry, most lawsuits that arise where a determination needs to be made about a workers classification relate to workers’ compensation coverage and in most instances the courts tend to find an employment relationship.    

Some scenarios to consider, you hire an exercise rider, the rider is free to come and go as they please, the rider can ride for other trainers, has special training to exercise the particular breed or sport of the horse, has the freedom to decide how to get the job done and is paid by the ride.  This exercise rider would likely be classified as an independent contractor.  A scenario where the court found an employee relationship involved a worker that performed general farm work such as feeding and watering the horses.  The court found this relationship to be one of employer-employee because the employer controlled the job duties, when the employee had to arrive and when the employee could depart.

It is also common in the equine industry to have interns, student volunteers or trainees.  The Department of Labor closely scrutinize whether the unpaid workers violate the Fair Labor Standards Act of 1938.  Internships may be classified as employees and would therefore must be paid at least minimum wage.  The Department of Labor applies a six part Wage and Hour test to determine whether an employment relationship exists.   Working students are unique to the equine industry and often receive a combination of board, salary, free lessons and/or room and board.  A working student under the Fair Labor Standards Act performing services at the direction of a farm owner or trainer is an employee that must be compensated consistent with the Act.  

As a farm owner and potential employer it is important that you understand which tests your state applies when determining the classification of a worker.  An experienced equine attorney will be able to provide the guidance you need to make sure you do not end up facing unexpected employment related liabilities.