When, Not If: The Holistic Approach to Risk Mitigation
By Amy L. Tracy

FOR A LAWYER, I’M A POSITIVE PERSON. I hear the birds singing. I see the bees pollinating. I appreciate the sound of the relaxation room waterfall as my tea brews and I indulge in a good book and granola. Unfortunately, I live in a world of worst-case scenarios. What if someone in the relaxation room pours a cup of tea, and it results in a third-degree burn? What if someone chokes on granola, passes out, and hits their head on the marble side table housing the snacks, causing a traumatic brain injury? What if someone gets up to inspect the waterfall, some water sloshes out, and they slip and fall on the beautiful slate flooring? Or what if none of this happens and someone just claims it does, but there are no witnesses or cameras to dispute it? Any of these scenarios might occur before a guest even enters a treatment room. If your operation has the tolerance (and budget) to offset occurrences like these, this is not a concern. Stop reading. Go on with your bad self.

Otherwise, how do you reconcile forward-facing customer goals with in-house protection? How do you align priorities to emphasize all your spa does to enhance the customer experience while still ensuring quality control and risk mitigation? When (not if) incidents, injuries or claims happen, you must be prepared. To be prepared, you must be calm, collected and in control of those things you can control. You might call this the “holistic approach” to risk.

The “holistic approach” emphasizes prior preparation to prevent poor performance. It encapsulates leadership principles so all members of the team buy in and work together, executing a shared vision of proven service, training, retention, hiring and supervision. It has a plan and knows how to activate it. It considers the balance of the guest experience, the spa team, Human Resources, Loss Prevention and the employee, with each knowing their respective roles in response to an incident. Most importantly, the holistic approach emphasizes good communication.

Alternatively, many take the “reflexology approach” to risk. In massage therapy, reflexology responds to areas of pain. Likewise, when an incident occurs and no clear response plan is in place, management reacts to where the incident causes the most “pain.” While this may extinguish the flames in the moment, it does not resolve the underlying issue, it does not offer a preventative solution and it allows critical aspects of the issue to go unexamined. Often, this approach occurs where priorities have been more focused on operational areas—growth, marketing, revenue, employee issues—and not on safety, retention, training and hiring issues. It is these scenarios that often result in litigation, and more often than not, adverse jury verdicts or expensive settlements. While focusing on other operational areas is critical, the foundations of quality hiring, training, supervision and retention are not boxes to be checked once and left alone.

Why is adopting a holistic approach to risk management important? It’s simple: Spas, massage therapists and wellness providers are targets. Plaintiff attorneys specifically advertise the ability to file suit against spas (specifically day spas and resorts; we will leave the med-spa discussion for another day). Websites lure customers with language like:

Getting a massage at a wellness center should be a relaxing and rejuvenating experience for your body and mind by relieving muscle soreness and reducing stress. In recent years, however, many allegations have come to light about sexual abuse in spas, including claims by clientele against individual massage therapists and the institutions that employ them. If you were the victim of unwanted sexual advances in a spa, contact a sexual abuse attorney to learn about your rights and begin the path to recovery.

From a single report of spa misconduct, whether valid or not, Plaintiff attorneys try to collect customers to gain leverage for settlements and newsworthy lawsuits. This does not even include claims related to other miscellaneous alleged slips, trips, falls, injuries or random negligence. Typically, claims against spas will become lawsuits alleging vicarious liability, negligence and/or gross negligence and negligent training, hiring, supervision and retention practices. In most jurisdictions, allegations of gross negligence and negligent training, hiring, supervision and retention can result in punitive damages, in addition to the compensatory damages related to other causes of action. Basically, this is legal mumbo-jumbo for suggesting you and your employee screwed up (big time!); you are responsible for your employee’s screw-up and should pay for it; and you also independently screwed up because you never should have hired the employee in the first place, you trained and supervised them poorly and you shouldn’t have kept them around. All of this can translate to serious money in the claimant’s pocket. A reflexive response to situations like these is difficult, incomplete and expensive. If you have acted holistically, the level of panic caused by the allegations in a complaint will be much more limited, and you will know how to dig in and move forward.

Step One: Before Any Incident
When it comes to incident response, proactive is far better than reactive. The investment you make in preparing for an eventual incident well before it occurs should include a careful evaluation of your businesses hiring, onboarding, orientation, training, retention and document management processes. To help with brainstorming related to these evaluations, see the resource on page 50.

To get a sense of any potential holes that may exist in your processes (and, just as importantly, documentation of them), pick up a few employee files. What do you see? Is there record of recent training? Are there any notes related to performance (good or bad)? Is paperwork up to date? If someone asked for a particular employee’s file for a lawsuit tomorrow, would you be able to support your contention they are a great employee, they are qualified, they are sufficiently trained and have no complaints against them? What does the paper prove? If it is lacking, find some time and help to get your files in order. Update your spa policies and protocols. Not only does this protect you, but refreshers in training your employees can remind them of techniques they may have brushed aside, excite them about their trade and improve the customer experience.

When training is complete, make a record of it (i.e., have the employees sign a sheet that identifies the training and includes a brief summary of what it covered. Make copies for each of the employees’ files, or keep a training folder for all such events to take place on a quarterly basis). Now, you have just enhanced your inhouse protection and your customer experience in the same 30 minutes. If you bring donuts and allow for a 90s rap music dance party in the last five minutes, you have also likely increased your employee retention.

If it isn’t already clear, let me reiterate: Document management is crucial. Know what you need in your files, and make sure it is there for however long it is supposed to be there. You should also know the legal term “discovery.” In litigation, discovery entitles opposing attorneys to any non-privileged documents, materials or information related to claims, defenses, employees and operations. Discovery is extremely broad, so be prepared—anything you have could be turned over to an adverse attorney. This includes emails. Be careful what you write and who is copied. Even deleted emails can be recovered, so it’s best to save them so your attorney will know what they are dealing with. Most importantly, don’t ever remove or destroy something that should be saved, particularly if corporate or a lawyer has issued a “litigation hold.” Spoliation is real and has real legal consequences.

Step Two: Incident Response
Your spa’s incident response is only as good as its plan. If your employees have been trained and have bought into the goal of running a cohesive spa and wellness center, that plan should be strong. Each employee should understand how they fit into the puzzle. For instance, if there is a slip and fall near the steam room, how do you find out about it? Is a locker room attendant notified? Has that attendant been trained on whom to tell and how to respond?

Incident response is tricky because it requires providing customer service to the guest while also gathering the information needed to investigate the loss for liability. The primary goal is to notify those who need to know about the incident ASAP. Follow your policies and protocols and training. If Loss Prevention needs to be notified, do so. If Legal needs to be notified, do so. If the incident is major—a sexual assault or significant injury, for example—you may want to get outside legal involved. Why? While I realize lawyers are sometimes (often?) obnoxious to deal with, having a lawyer involved on the front end is helpful to direct traffic, gather all the needed documents and have someone outside your organization to ensure all aspects of the incident are being handled in a cohesive manner—in other words, the right hand will know what the left is doing. The most important reason to have a lawyer involved from the very beginning is something called “attorney-client privilege, work product doctrine and anticipation of litigation.” These are privileges that attach to the investigation and all findings—all interviews, all notes and all opinions related to the event, as long as it was attorney-directed or the attorney is copied and included and it was not done in the course of normal business.

Ensure there is good communication among all parts of your organization—do not rely on Loss Prevention attending to the guest’s needs. Often, their role is to collect information. The spa director or other leader should handle forward-facing needs with the understanding that litigation is possible. This means anything you say or do will get scrutinized in hindsight. Find out the facts. Make the guest comfortable. Inquire if they would like police/ambulance/etc. called. If they decline, you may want to do so anyway. Do not accept liability or responsibility in the heat of the moment. You don’t know what really happened and are in no position to make that call. When it comes to handling payment for the service, make it clear that the service is being comped because it did not meet their expectations—and for no other reason. Invite them to return.

When the guest leaves, interview—in conjunction with HR and legal counsel—everyone who interacted with them. Document everything (or have the attorney do it). Pull all records related to the guest. Gather surveillance footage from around the property that shows the guest. Preserve everything (and give it to the attorney). Follow up with the guest for customer service purposes, but be careful that you do not solicit a claim. This should be handled in a strategic manner and Legal and corporate may be consulted for specific handling. If the guest reaches back out, respond in a timely manner, keeping in mind your response will be exhibit number one in litigation. Make sure the person responding is who you want to represent the spa, and proofread the response.

If you receive a letter of representation or a preservation letter from an attorney, contact corporate and your insurance carrier immediately. The next call should be to counsel.

As you can see, the recommendations are nearly endless. Ultimately, they are just that—recommendations (which are often scenario-specific). There is much to ponder, but considering at least some of these issues in advance is better than facing an incident or lawsuit unprepared. While seeing them all in one place may feel overwhelming, I would remind you that the only way to eat an elephant is one bite at a time. Start somewhere. Start today. When an incident happens, you will be able to breathe, and your operations will not be completely disrupted by having to figure out how to react.