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Entries in New Jersey (4)

Wednesday
Jul062016

New Jersey Trial Judge Denies Class Action Suit Targeting Health Clubs

This spring, a New Jersey judge, in a ruling favorable to the health club industry, denied certifying a class action filed on behalf of 18,000 health club members claiming that a group of fitness centers was not following state law.

In Mellet v. Aquasid, Judge Anthony Pugliese, from the bench of a state Superior Court based in Camden, blocked a consumer class action lawsuit from advancing, representing a victory for the health club industry. The ruling made two significant distinctions between gym membership and other types of consumer goods and services.

Club Contracts Different from Other Consumer Agreements

First, Judge Pugliese rejected that the fitness center’s use of liability waivers is illegal under New Jersey’s Truth in Consumer Contract and Warranty Notice Act, meant to address unconscionable contract terms. He affirmed the permissibility of liability waivers for clubs, remarking that club contracts are different from other consumer agreements on the basis that “when you engage in rigorous physical activity—like is encouraged in a health club [and] is the entire purpose of a health club—there are chances that you may injure any range of muscles, tendons, bones, nerves, what-have-you.”

He cited a 2010 case, Stelluti v. Casapenn Enterprises, in which a health club’s waiver of liability was upheld and a patron’s negligence suit was dismissed. That case concerned an injury sustained on an indoor cycling bike.

Late Fees Don't Violate NJ Retail Installment Sales Act

Second, Judge Pugliese rejected that the fitness center’s use of late fees and similar charges violated the New Jersey Retail Installment Sales Act (RISA), which limits fees assessed to consumers. He stated that RISA is meant to apply to installment loans involving the sale of goods, such as a television.

The decision in Mellet v. Aquasid demonstrates that health club membership is distinct from other types of consumer goods and services, and so is not always subject to broad state consumer protection laws that apply to most industries. 

The case is now under appeal. If you have comments or questions, please send them to IHRSA’s public policy team at gr@ihrsa.org

Thursday
Oct012015

Wearables, Health Data, and Privacy

The desire to lead a more physically active life has increased significantly over the past five years. There’s no better evidence of this than the soaring sales of wearable fitness devices (“wearables”) such as iFit, Fitbit, Jawbone, the Microsoft Band, and the new Apple Watch. (See “Don’t Be Wary of ‘Wearables,’” August CBI, pg. 49.)

These biometric marvels, designed to help people pursue, achieve, and maintain an active and healthy lifestyle, track functions from the simple and straightforward to the impressively sophisticated. At the low end, they can count the number of steps or miles a person walks, and calculate the number of calories they burn, during a day. At the high end, they can monitor heart rate, blood pressure, and even the duration and quality of one’s sleep.

And this technology is just getting started.

Health clubs, of course, have been helping people to live healthier lives, well, for as long as health clubs have existed. Until recently, though, they’ve found it difficult to precisely measure and accurately quantify the success of their programs and services.

The advent of wearables may provide a satisfactory solution.

Their acceptance by the public has been nothing less than remarkable. Parks Associates, a market intelligence firm based in Dallas, reports that, by the end of 2014, fully 30% of Americans had adopted some sort of wearable. And now clubs are following suit.

The Atlantic Club, with locations in Manasquan and Red Bank, New Jersey, introduced the MYZONE MZ3 program in 2013, and is utilizing it to improve member outcomes and increase retention. Thus far, some 750 to 800 individuals have taken part. The program, based on a gamification strategy, involves five wellness challenges per year. The participants’ individual activity performance data is displayed at the club, and also sent to them via e-mail so they can monitor their progress.

Each challenge concludes with an event that rewards participants and confers special prizes on top achievers.

“The program is great because it fosters friendly, healthy competition that promotes club usage, wellness, weight loss, and healthier living, all in a fun-filled environment,” says Kevin McHugh, the CEO of the club.

Though wearables up the ante with respect to exercise documentation, they raise questions not only about how clubs can capitalize on the technology, but also about data security. Because the devices gather a wealth of health information, and, in the future, will likely gather even more, there are concerns about possible violations of club members’ privacy.

The U.S. Equal Employment Opportunity Commission (EEOC) has recently addressed the issue, questioning how the data is being used and by whom, and it’s been suggested that federal laws might need to be amended.

Some of the most basic metrics, e.g., number of steps walked per day, probably wouldn’t be considered medical information, and could be safely shared with, for instance, a personal trainer or wellness program administrator. Other, more intimate matters, e.g., blood pressure and resting heart rate, are clearly medical in nature, and, therefore, would need to be dealt with more carefully.

If new regulations were issued to prescribe acceptable practices for the handling of this sort of data, clubs might be obliged to create systems to ensure and monitor enforcement, incurring additional costs. It’s conceivable that such restrictions might also have an impact on program design, participation, and growth.

It’s important that club operators be aware of these issues, which could become serious ones in the future. Pending further formal clarification, though, they should be cautious in deciding what type of health information can be shared, and when and for what reasons, in order to avoid legal difficulties.

Monday
Jan122015

New Jersey Alert: New Membership Contract Requirements

New Jersey Bill Calls for New Membership Contract Requirements for Health Clubs

Legislation has been introduced in the New Jersey legislature that would impose new, potentially costly and burdensome requirements for health club operators in the Garden State.
 
Assembly Bill 4034 would require clubs that automatically renew membership contracts to send a notice to members within 60 to 90 days following completion of the initial contract agreement and the initiation of the automatic renewal. The notification would have to be sent by registered or certified mail.
 
IHRSA is currently working with our lobbyist in Trenton on outreach to key legislators to communicate the negative impact that this bill would have on NJ clubs. To learn more about the bill and our efforts in New Jersey, IHRSA members are invited to read more...

In 2014, IHRSA identified and neutralized consumer protection threats in 7 states. IHRSA anticipates that membership contract restrictions will be an issue in 21 states, and we are working with our legislators to ensure that no harmful bills move forward in 2015.

Friday
Sep122014

Health Clubs Heavily Fined for not Issuing Refunds

Five health clubs in New Jersey have been cited and fined by the state's Division of Consumer Affairs for failing to give full refunds to members who canceled their memberships within the allowed three day "cooling off period." The fines total a hefty $31,000, according to a press release sent to IHRSA by our lobbyist in Trenton. Two of the five clubs were also cited for not registering with the Division of Consumer Affairs. The clubs can contest the citations, but they risk even greater fines if the Division still finds them in violation of the law. Read the full press release from the Division of Consumer Affairs.

While this news affects clubs in New Jersey this time, it serves as a great reminder to always be up to date on your state's rules and regulations. IHRSA members are invited to access information on membership contract laws and regulations in your state at ihrsa.org/state.