What Is a Personal Trainer Independent Contractor Agreement?
A personal trainer independent contractor agreement is a legal document that outlines the terms of the agreement between a personal trainer and a gym or business that employs them on an independent contractor basis. As the name implies, the arrangement between a personal trainer and a gym as it pertains to employment standards is very different than it would be for a traditional employee or subcontractor relationship. For example, an independent contractor is their own business , meaning they are responsible for paying their own taxes and issuing their own invoices. This type of agreement provides clear terms and expectations so that both the personal trainer and the business understand the terms of the arrangement. Personal trainers who work as independent contractors must obtain their own liability insurance. Having a precise contract outlining the precise terms of the agreement will help protect both the business and the personal trainer in terms of insurance claims and liability.
Key Components of the Agreement
The key elements of the agreement will include a scope of work, payment terms, duration and termination conditions. The scope of work can and should be as detailed as the parties wish. The scope of work will usually outline the services that the personal trainer will be required to provide to the gym. This may include hours of availability, days of the week, specific times to train clientele, etc. For example, if you have a personal trainer who typically trains his or her clientele early in the morning, then it may be prudent to list the exact times to further recap the parties’ intentions and to avoid future claims that the gym impeded the personal trainer’s success by not opening early enough to accommodate workout appointments.
The payment terms will dictate when and how the gym shall compensate the personal trainer for the services provided. The agreement will most likely provide for payment on a per hour or per session basis. A common industry-wide practice is for a gym to pay 55% of the revenue per training session. The remaining 45% of the revenue is then kept by the gym. Moreover, payment is typically made every two weeks.
The duration of the agreement will set forth how long the agreement will remain in effect. Many personal trainer independent contractor agreements cover a specific period of time (e.g., six months to one year). The parties may also agree to renew the agreement at the end of the specified period; however, the option to renew should not occur frontally in the agreement, but rather be a separate agreement to ensure that both parties are aware of the specific terms.
Finally, the termination terms will set forth the conditions under which a party may unilaterally terminate the agreement, with or without cause.
Responsibilities and Services
A. Roles and Responsibilities
The typical elements of a mutual agreement between the employer and the independent contractor are usually defined in a personal trainer’s independent contractor agreement (also known as a services agreement) as follows:
• Services Provided by Trainer – Specificity is required when listing the services to be provided by the personal trainer. For example, a personal trainer generally provides services such as advising and assisting with one-on-one training and leading group classes. The independent contractor agreement should not state "landscaping" services, unless that is what the parties have agreed. Further, although the plan laid out for the personal trainer should be detailed, it is equally important to avoid provisions that will have the personal trainer acting too much like an employee. For example, "the personal trainer agrees to work no less than 30 hours per week at which time the trainer will be subject to termination without cause" would make the personal trainer an employee. The "work hours" clause and the provision on disciplinary actions are Red Flags that are too close to an employer/employee relationship, and the result will be an employee.
• Services Provided by Client/Gym – This often looks like providing the personal trainer with access to their facility and equipment, promotional materials, gym supervision and billing.
• Payment provisions – It is important that payment is agreed upon and clearly laid out in the agreement.
• Termination provisions – An independent contractor may terminate the contract with notice to the gym or the gym may terminate the provider with or without notice.
Legal Protections and Considerations
There are many ways both the personal trainer and the client can be legally protected by a well-crafted independent contractor agreement. If properly structured, the relationship can be and often times is immune from a number of potential claims.
Professional Liability
If the client sustains an injury or a loss during the period of training or exercise, it is vital to require a written release of liability from the client. This release will protect the trainer and gym from any future lawsuit arising out of that injury, since the client has agreed in advance not to sue. A release should also contain an indemnity clause, so that the personal trainer is reimbursed for any expenses incurred in defending a lawsuit brought by the released person.
Insurance
An independent contractor is supposed to carry their own insurance. This insurance must include the gym as an additional insured. The additional insured should receive a copy of the certificate of insurance. The certificate of insurance must specifically identify the additional insured and the activities for which they are being covered.
Confidentiality
At times, the personal trainer may be privy to confidential and/or private information about the client. This includes, but is not limited to medical information, personal history, exercise regimen, and payment history. If this information is not kept confidential, the client may take legal action. Therefore, a confidentiality provision should be included in the independent contractor agreement.
Mistakes to Avoid
The most common mistake in personal trainer contracts is either drafting and/or signing an independent contractor agreement without knowing all of the relevant issues. Personal trainers and gyms are commonly found to be joint employers and independent contractors can be misclassified. When independent contractor agreements are drafted without paying attention to these issues, the agreements can be rendered useless, unenforceable, or, worse, may actually cause down-the-road liability.
Another common mistake is underestimating the importance of clear terms or failing to define terms at all. Gyms and personal trainers have told me that they expect all of their independent contractor agreements to be the same but they don’t want to pay for professional assistance to draft and/or modify their agreements . This is shortsighted. I have seen finer print change the meaning of an entire agreement.
An additional mistake that gyms and personal trainers make is not providing their internal policies and procedures to independent contractors. For instance, gyms commonly refer to their personal trainer internal policies and procedures in their independent contractor agreements. If all of the conditions for an offer of employment have been met but the personal trainer does not receive the internal policies and procedures, and later receives a termination notice, the personal trainer may have fallen through the cracks. This could lead to liability, such as a retaliation claim, brought by the personal trainer against the gym.
How to Create a Robust Agreement
Creating a comprehensive personal trainer independent contractor agreement can be complex and should follow some general guidelines. The agreement should set forth the terms and conditions of the relationship, identify the expectations of the trainer in a comprehensive manner, address the ownership of client lists, require confidentiality and non-solicitation, as applicable, and set forth the term of the relationship, among other things. Many of the clauses are standard and self-explanatory, but it is advisable that the agreement be reviewed by a lawyer well-versed in employment law to ensure that each clause is appropriate for the business and does not inadvertently turn the trainer into an employee. Although many people use "sample" agreements available online, one size does not fit all. One size fits most can still be inappropriate for your business. A number of available sample agreements draft the clauses too broadly or use overly-smothering clauses that virtually guarantee the trainer will be treated as an employee. On the other hand, some agreements must be further tailored to meet the specific needs of a business, such as a franchisor or a clinic providing health services including personal training. For example, for a clinic, the non-solicitation and confidentiality clauses must be more detailed than they would be for a personal trainer at a franchise facility or at another gym, studio, etc. The key is to find a balance between setting forth the necessary and appropriate terms of the relationship and rendering the trainer an employee. This is where a tailored agreement drafted by a lawyer experienced in this area is essential.
Analyzing Case Studies or Examples
To bring the importance of personal trainer independent contractor agreements to life, let’s look at some hypothetical case studies that illustrate how they can prevent disputes and litigation.
Case Study 1: Mike, the Independent Trainer
Mike is an experienced personal trainer who recently started operating out of a new gym that is a little farther from his home. His rate is steep but he gets results, and he keeps a full roster. His longtime customers followed him to the new gym to keep training with him. The owner of the gym agreed to provide him with a space for his client sessions.
Just to be polite, Mike had the gym owner sign the gym’s standard personal trainer agreement without any modifications. The agreement referred to Mike as an employee, rather than an independent contractor, and it stated that the gym owned the rights to any materials Mike created or used for his personal training sessions.
Soon after being retained, Mike began to question whether he was being compensated properly. He had learned that other personal trainers at the gym were charged different rates, and Mike felt that his high fees should be rewarded with exclusivity in the territory and possibly royalties over such things as DVDs and books he sought to develop. He raised the issues with the gym’s owner, who ignored the issues and reminded Mike that he was an employee and reminded Mike that he moved his client roster to the gym, so he was lucky to have a job even at this lower-than-market rate.
In this case, a written personal trainer independent contractor agreement and a little communication could have gone a long way. Had Mike insisted on customizing the standard agreement in his favor, he could have engaged in a conversation with the owner about the value of exclusivity to the business and how that could be reflected in compensation.
Case Study 2: Jay, the Gym Owner
One of the biggest challenges gym owners face is compliance with New York employment laws. In many cases , gym owners think they’re doing everything right, but later end up being shocked to find themselves on the hook for unpaid wages or associated documentation. Let’s look at the situation from the perspective of Jay, a hypothetical gym owner.
Jay has been in business for 10 years and has used one standard form personal trainer independent contractor agreement since day one. He signs every new trainer to the contract without much thought. Over the years, he’s moved the business to three different locations and expanded the services offered and the types of fitness professionals working at the gym. Recently, Jay hired five more personal trainers, and met with each to sign his standard form agreement.
After these meetings, Jay’s wife asked him what will happen if the trainers ever challenged their status as independent contractors. Jay responded with, "it shouldn’t be a problem; after all, they’re contractors and not employees."
The trouble with Jay’s response is the idea that all personal trainers are always independent contractors is not true. Personal trainers, like contract employees of any business, are classified based on the nature of the work performed and level of control exerted by the business owner.
At this point, Jay’s standard form agreement is an easy target for those personal trainers’ attorneys to challenge. It is easy for a court to find that the language of the agreement constitutes control. Since the true nature of Jay’s relationship with the trainers is employee/employer, Jay could be in trouble when it comes to complying with basic employment laws. If an attorney was able to launch a class action lawsuit against Jay’s, the financial consequences could be devastating.
In both examples, it is easy to see how an independent contractor agreement can help avoid a variety of headaches. While there’s no guarantee of immunity from future litigation, a well-crafted agreement will make it much more difficult for trainers to challenge their independent contractor status.