New Year’s resolutions are a fitness club owner’s best friend. Countless Americans resolve to get into better shape in the new year, leading to an uptick in sign-ups for gym memberships.These lofty goals are often shortlived and by the second week of February, around 80% of those “resolutioners” fail to live up to their goal ers” fail to live up to their goal. Gyms love this optimistic spirit because many of these new members often sign up for annual plans or forget to cancel their monthly memberships and end up paying membership fees even though they are lounging on the couch instead of reaching their target heart rate. What business owner wouldn’t love to get paid for nothing?
Recently, a fitness studio chain, Orangetheory Fitness (“Orangetheory”), which features its own one-hour, full body, group interval workout, was hit with a proposed class action lawsuit. The suit alleges the fitness chain, and one of its local franchises, went a bit farther than just marketing to hopeful “resolutioners” and that its membership cancellation practices violated the Illinois consumer protection laws. (Robertson v. Perloff Providence Studio 2, LLC, No. 2018-CH-04753 (Ill. Cir. Ct., Cook Cty filed Apr. 12, 2018). According to the complaint, Orangetheory’s agreements with its members contain language that seems to indicate that a customer can get a prorated refund if they drop the medicine ball and cancel their membership within three days of signing up. However, the lawsuit claims that, practically speaking, customers are unable to cancel a membership without paying for at least two months of classes.
Illinois state law seems to understand that consumers often make spur-of-themoment decisions – especially if that decision was made while recovering from a New Year’s Eve Party – so they require gyms to pay refunds to customers who cancel within three business days. The Illinois state law in question, the Illinois Physical Fitness Services Act (“PFSA” or the “Act”), also requires gyms to include the requirements and prohibitions of the PFSA in the written membership contract, to provide contracts to their customers in writing at the time of signing and to maintain original copies. The PFSA also provides that any waiver by the customer of the protections of the Act is unenforceable and any contract for “physical fitness services” that does not comply with the applicable provisions of the Act is void. Any customer injured by a violation of PFSA may also bring an action for monetary relief (up to treble damages), plus attorney’s fees.
Prior to joining, the named plaintiff, Stuart Robertson, alleged that he viewed promotional materials from Orangetheory that suggested new members were entitled to a “Money Back 30Day Guarantee.” Subsequently, the plaintiff signed up for a $129/ month membership and claimed that the language of the membership agreement allowed for cancellation with 30 days of notice (less a prorated refund). The plaintiff also claimed he was not given a copy of his contract, as required under the PFSA. The original signed contract, Robertson claims, also allowed for a partial refund if he canceled within three days. However, several days after he joined and wasn’t feeling the burn, the plaintiff notified the gym that he wanted to cancel his membership but was apparently told he would have to sign a separate cancellation agreement whereby he would agree to pay for two months (a representative allegedly informed him that even if he cancelled the same day he joined he would have been billed for the second month). Furthermore, Robertson claimed that after he refused to sign the cancellation form and told the representative that he would instruct his credit card to block all future Orangetheory charges, he was told there would be “further consequences” for failing to pay the remaining fees. Members often join a fitness club to have a trainer coax another round of burpees out of them with some spirited encouragement, but in this case, the plaintiff was left especially deflated and decided to jog forthwith to his attorney’s office.
The lawsuit alleges that Orangetheory did not alert its customers of their cancellation and other rights under the PFSA and instead billed customers for two months of membership fees and even suggested that those accounts that refused to pay would be forwarded to collections. The suit asserts that Orangetheory violated the PFSA in several ways, including by: (1) failing to disclose the right to cancel within three days or allowing members to cancel within three days with a refund; and (2) requiring members to sign a cancellation form which conflicts with the original membership agreement. The plaintiff seeks class certification for several classes of consumers who, generally speaking, have sought cancellation of their gym memberships and have been denied refunds, compelled to pay additional fees, or have had their accounts sent to collections. Additionally, the suit also brings claims under Illinois consumer protection laws alleging that Orangetheory engaged in unfair or deceptive acts by attempting to enforce its cancellation policy and extract additional fees that may have conflicted with state law. Lastly, the plaintiff lodged a contract claim, asserting that Orangetheory breached its contracts by imposing cancellation charges that exceeded the charges imposed under the membership agreement and by failing to issue prorated refunds to members who cancelled within the first three days of membership.
“No pain, no gain” was a 1980’s catchphrase that perhaps did not reflect responsible exercise, as in some cases, joint pain and other discomforts are the body’s way of telling you to take it easy. In this case, it seems Orangetheory, at least according to the plaintiff, applied this mantra quite seriously with respect to customers who canceled their memberships, purportedly in violation of Illinois law. Now Orangtheory faces the possibility of getting its own high-intensity workout at trial.