What Your Pilates Business Needs to Be Legally Protected

As a Pilates professional, safeguarding your business legally is as important as your passion for fitness. While most of us do not enjoy discussing legal essentials, it’s important to stay protected. Legal documents are like a seatbelt in the sense that the moment that you need it, it can totally save you. And if you don’t have them done properly, it can cost you your business.

Our new episode of the Expert Interview Series features Cory Sterling, the owner of Conscious Counsel. This video is your comprehensive guide to understanding and implementing key legal practices for your studio’s safety and success. And… at the end of the interview, you will also get access to a free Pilates legal bundle.

Key Interview Highlights:

• Legal Risks & Solutions: Uncover how to prepare and protect your business from legal challenges.
• Pilates Studio Legal Must-Haves: The essential legal documents every studio should have.Learn about the four critical legal documents: Privacy Policy & Terms and Conditions, Media
• Release/Social Media Disclaimer, Waiver of Liability, and 1099/W2 Classification Agreement.
• Hybrid Business Legalities: The ins and outs of legal requirements for both online and in-person services.
• Keeping your studio and teachers safe: the Intricacies of Non-Compete, Non-solicitation and Non-disparagement clauses.
• Recording Classes & Legalities: Key legal points for recording Pilates classes.
• Updating Legal Documents: The importance and frequency of updating legal documents.

Resources:

• Schedule a Free Legal Consultation: Ready for personalized legal advice? Book your free consultation now at Calendly.
• Download Free Pilates Legal Bundle: Get your hands on our exclusive Pilates Legal Bundle for free! Download here: Conscious Counsel Pilates Bundle.
• Special Offer on 4-Documents Package: Grab a $400 discount on our comprehensive 4-documents package, tailored for Pilates studios.
  • Original Price: $3288 USD
  • Offer for Webinar Participants: $2888 USD
  • Get the deal here: Conscious Counsel Discount.

Meet Our Expert

Why is it important for Pilates business owners to think about legal protection for their business?

Cory Sterling: Businesses in Pilates and fitness must consider legal protection. It’s not about errors, but potential difficult situations. Without legal safeguards, dealing with people’s bodies and health can lead to liabilities. People need to think before teaching without considering the legal implications. Legal issues are often invisible, and awareness is crucial. A law firm specializing in Pilates aims to educate professionals about practical legal needs.

Which situations could occur without legal protection?

Cory Sterling: Many legal issues in Pilates are often overlooked. When becoming a Pilates teacher, people may not consider liabilities and duty of care. I want you to know that the responsibility is to ensure no harm comes to those engaging in activities with you. The invisibility of these issues is the focus of this conversation — to raise awareness. A law firm specialized in Pilates aims to educate professionals on their practical legal needs for greater awareness.

What types of situations can these legal essentials save people from?

Cory Sterling: Legal documents may seem less crucial when everything is going well. However, when accidents occur unexpectedly, having legally recorded documents in place becomes essential. Nobody plans for accidents, but having legal paperwork can result in smaller financial penalties. 

So really, if the question is what can go wrong? In my six plus years of business I’ve worked with over 1,000 clients, and I’ve seen a lot of things go wrong. Here are just a few examples:

• I have Pilates professionals who have online courses and on-demand videos, and someone gets injured on their own, and their insurance didn’t cover them, so then they’re personally liable for all of it.
• I’ve had a lot of clients who have issues with some students that they work with, either if it’s payments, or cancellations, or refunds, or rescheduling, or, you know, challenging behavior.
• In terms of privacy information collection, I’ve had clients who collect information. All of their online stuff has been hacked.The information has been compromised. They didn’t have the right documents in place so they’ve been exploited. 

What documents do Pilates studio owners need to have in place to be legally protected? 

Cory Sterling: Before explaining the documents, I’d like to provide some context on how the system works and what happens when there’s a problem. Imagine a scenario with no issues – no accidents or problems. In such cases, it might seem fine not to have specific documents or to use templates.

But legal documents are like a seatbelt in the sense that the moment that you need it, it can totally save you.

And if you don’t have it properly, if it’s not done properly or you’re not using it properly, it can cost you your business.

And unfortunately I do have clients where it has cost in their business.

In essence, investing in legal documents isn’t just about protection; it’s about the efficiency and ease with which you can address disputes when they arise. This approach can save both time and money, providing a solid legal foundation for your business and ensuring a professional resolution process.

It’s important to understand how the problems actually happen. 

1. Someone gets injured or hurt or upset or disagrees or wants a refund or there’s some sort of problem.
2. They’re going to send you a letter before they hire a lawyer usually unless they got very, very severely injured. In this letter they’re going to say,
   “Hey, I’m a Pilates student with you and A-B-C happened. And now you’re responsible to pay me $35,000 because of this thing that happened.”
   And they believe that you’re responsible and that you’re liable.
3. At that point, one of two things is going to happen.
   1. If you have customized specific agreements in place: you’re going to be able to demonstrate to show these documents and say  “No, I had you sign this agreement before we worked together. This is what it says. You agreed that you wouldn’t hold me responsible.” And then you can respond in that way or forward it to your lawyer who can respond on your behalf and then something that could be a really big problem and really expensive and really stressful just disappears.
   2. If you have no documentation you’re not able to respond with the same strong legal position. And then you’re going to be freaking out and you’re going to call me or call another lawyer and you’re going to try to understand what’s happening. And you’re going to realize that because you didn’t set the relationship up properly from the start, you can’t dismiss it so quickly and easily.
      • There’s a possibility of getting drawn into negotiations for settlement or the possibility of actually getting sued. 
      • You’re starting to pay a lawyer on retainer and it’s becoming very expensive.
      • All of your money is going away and possibly at risk. So really, but before I dive into the main issues, I just want to stress that what you’re really paying for with legal documents, in addition to being protected, is knowing that if something happens, you can quickly, easily and professionally resolve it.

I just want to stress that what you’re really paying for with legal documents, in addition to being protected, is knowing that if something happens, you can quickly, easily and professionally resolve it. Without it taking too much time, too much money, too much effort, that’s all that’s required.

I explained all of this because as I go through these docs, discussing specifics and what sets them apart, remember they work only when used and tailored to your business.

Privacy Policy and Terms of Service

First up, privacy policy and terms of service. It’s crucial online, where everything and everyone is. You’re always gathering personal info – first name, last name, email – all considered personal information.

When a problem arises with holding personal information, my initial legal question is, “What does the document say?” Please send me the documents; anything less is inadequate. Insufficient documentation puts my client in a weaker legal position, leading to various issues. This applies especially to processing payments, sharing credit card information, and dealing with software providers. Does the client intake form concept make sense?

Media Release and Social Media Disclaimers

These two critical documents are often overlooked. 

A media release permits the use of someone’s image for various purposes, such as testimonials or advertising. Legally, if profit is involved, consent is required, highlighting the need for a signed document when using someone’s image for promotional gains. This is particularly relevant on social media, websites, and advertising campaigns.

The social media disclaimer, on the other hand, protects against liability for advice or instructions given on platforms. Whether suggesting Pilates positions or fitness tips, it shields you from potential damages resulting from followers following your advice. Embedding this disclaimer in your privacy terms on your website or link tree is the practical approach, acknowledging that signed disclaimers are unfeasible during live sessions. This ensures clarity and places responsibility on the viewers, minimizing risks associated with online guidance.

Waiver of Liability

So then the next document that’s really important is the waiver of liability. And this is the agreement that you have with your clients and anyone who’s purchasing your services or accessing your services that you’re able to control. It explicitly outlines that, in exchange for participating in Pilates, they won’t hold you responsible for any damages. The specificity here is paramount, covering all activities, modalities, in-person, online, or on-demand sessions, and the equipment used both in your services and at clients’ homes.

This document, among all, demands meticulous attention. Its proper execution is vital, as an improperly crafted waiver could have significant legal consequences. I understand the importance of tailoring it to your specific services. Whether it’s addressing the use of particular equipment or the nature of on-demand classes, a comprehensive and specific waiver ensures you are protected from potential legal issues. It’s about having airtight documentation that leaves no room for ambiguity or misunderstandings, safeguarding both you and your clients.

1099 or W-2

Let’s keep moving. And then the last agreement is either a 1099 independent contractor agreement or a W-2 employee agreement. Certainly, the classification of workers as either 1099 independent contractors or W-2 employees is a crucial aspect that demands careful consideration. It’s arguably the most legally intricate issue among all the agreements.

The choice between hiring employees or contractors comes with distinct financial and administrative implications. While contractors offer cost savings and simplicity, misclassifying workers can lead to serious repercussions. This misclassification risk includes potential legal issues, especially if employees report misclassification or seek unemployment insurance. Additionally, during business audits, consistent misclassification could result in penalties, fines, back taxes, and other financial liabilities.

Moreover, it’s emphasized that the classification is jurisdiction-dependent, varying from state to state. In some states like Florida, having 1099 contractors may be acceptable, while in states like California, it might be more challenging, and employees could be the more likely classification.

Determining the worker’s status often hinges on the degree of control exerted over their services. Questions regarding when and where they work, the level of control you have over their schedule and tasks, all factor into the classification decision. It’s a nuanced evaluation, requiring awareness of state laws, the nature of the services provided, and the level of control exercised by the business.

Navigating the employee-contractor situation necessitates a thorough understanding of local regulations and careful consideration of the level of control exerted over the workers’ services. It’s a complex area where legal guidance and adherence to state-specific regulations are crucial for avoiding potential pitfalls.

Is there anything different in the legal documents required for employees as opposed to independent contractors teaching virtual classes? (because they can be doing it from their home)

Cory Sterling: It’s a really good question. Sure, when you have employees, you need an employee handbook to outline rules and control services. As an employer, you can specify tasks and details, like dress code or teaching procedures. For contractors, it’s different; you can’t dictate much. For example, in an online studio, telling a contractor what to do makes it seem like you’re treating them as an employee, which raises legal considerations. Employee legislation comes into play, triggering questions about employment terms, severance, and more.

Is there anything that Pilates studio owners should keep in mind when their teachers record classes for the video platform? 

Cory Sterling: For clients, dealing with intellectual property (IP) creation is a common issue. An important distinction is that an independent contractor retains ownership rights, unlike an employee whose creations belong to the employer if made in the course of employment. With contractors, it’s crucial to include a “work for hire” provision in the agreement explicitly stating ownership by the client. This is particularly relevant for creative projects like teacher training manuals. Without a “work for hire” provision, contractors may be entitled to a share of profits proportional to their contribution. Customized agreements are vital to avoid issues down the road, such as demands for ownership or compensation that can arise unexpectedly in the absence of clear documentation. 

Non-Compete Clauses: Should a Pilates business have non-compete agreements in place for their employees and contractors? 

Cory Sterling: Non-compete is one of the most common things that will come up for me from studio owners. Where they say, I’m bringing this person on and I don’t want them to steal my clients. 

It’s important to note that non-competes, often requested by studio owners, vary by jurisdiction and are rarely enforceable due to their restrictive nature. Courts are unlikely to uphold clauses that significantly limit an individual’s ability to earn a living. For instance, if an employee works part-time and earns a modest income, imposing a broad non-compete is unlikely to be deemed fair. Instead, agreements can include non-solicitation clauses, preventing employees from actively poaching clients. While non-competes may be suitable for specific roles like full-time management positions with higher salaries, they generally face challenges in enforcement.

Some clients still prefer to include non-compete clauses in agreements, even if they acknowledge the challenges in enforcement. This is often driven by a desire to deter individuals from pursuing competitive opportunities. While it’s legally permissible to include such clauses, it’s essential to make clients aware of the potential difficulties in enforcing them should the need arise. The primary purpose of non-compete agreements may be to act as a deterrent rather than a legally binding restriction.

How can a contract address issues like non-solicitation and non-disparagement?

Cory Sterling: The effectiveness of addressing issues like solicitation and disparagement depends heavily on the agreements in place between the parties. Having a well-drafted independent contractor agreement with clear non-solicitation and non-disparagement clauses provides a legal basis for taking action if issues arise. In cases of explicit solicitation, sending a cease and desist based on the signed agreement can be effective in curbing such behavior.

It’s crucial to highlight that relying on generic or poorly defined documents may leave you unprotected. Specific agreements tailored to the situation provide the necessary legal leverage. The absence of written agreements, especially regarding non-disparagement, makes it challenging to enforce cooperation during conflicts.

In summary, addressing issues involves examining the existing paperwork. Having precise, signed agreements simplifies the process of drafting responses and seeking cooperation. Without such documentation, navigating disputes becomes more complex.

What is your process of crafting customized legal agreements for your clients?

Cory Sterling: I’m happy to talk about that. We’re proud to have celebrated receiving 355 five-star Google reviews. Each one is a testament to our commitment to excellence.

Our approach to serving our clients is unique because we understand that each set of documents and each business operation is different. Communication is key in our process. Typically, it starts with a consultation where I meet with the client. During this initial 20-minute conversation, we discuss the goals of their business, how they operate, their concerns, and any specific issues they might be facing.

After this consultation, we send them a link to answer some questions. Based on their responses, we draft agreements. The process involves a collaborative effort using a Google Doc, where we go back and forth, asking questions to ensure that all their needs are met and they feel fully supported.

At the end of our collaboration, we schedule a call to confirm that everything has been addressed and to clear up any uncertainties. We offer unlimited edits, revisions, and support for three months with all of our packages. This ensures that as clients begin to use the documents, they can feel comfortable reaching out to us for any clarifications or further understanding they might need

How often documents should be updated and why?

Cory Sterling: There are two reasons for updating documents. Firstly, if the law changes. For example, privacy policies in California changed on January 1, 2023. When the law changes, there’s a new standard, and we need to update the documents. At Conscious Counsel, we send an email to all affected clients, informing them of the change, assuring them of our support, and offering a free tune-up.

The second reason for updating is if the relationship with your client changes. If you’re raising your prices, introducing a new service, shifting to online or in-person activities, pre-recorded classes, or classes outside, the document should reflect the current relationship. Laws are about using a document to capture the relationship, so if that changes, the contract should change accordingly.

How can a Pilates business owner work with you to draft all of their legal documents? 

Cory Sterling: Yeah, I love what I do, and it’s really important for me to work with industries that I myself participate in or that I understand. I love yoga, Pilates, health coaching, and that’s who I am, so that’s who I work with.

In terms of the offer, for anyone coming from Pilates Bridge, we’re offering a $400 discount on our package of four documents. I talked about the legal essentials package today, which includes four documents. If anyone has another need or wants to substitute one agreement for another, we’re happy to honor that. The original price is $3,288, but with the $400 off, it’s $2,888. This one-time all-in fee includes unlimited edits, revisions, and support for three months. You can call me whenever you want. I spend all my days on calls with clients, supporting them, answering questions, and ensuring they feel comfortable.

Ultimately, I want to see Pilates professionals taken care of. As we discussed earlier, not many people truly understand these issues, and I’ve been doing this long enough to get that. So, if you operate a Pilates business, you’ll need these agreements, and we’re here to get them for you, support you in using them, and handle any problems that may arise in the future. If there’s an issue, just shoot us a note, and we’ll take care of it.