[Editors' Note: 5 p.m. EDT, April 2, 2020 - This story has been updated with a statement from LA Fitness about its efforts during the COVID-19 shutdown. 3:30 p.m. EDT, April 2, 2020 -This story has been updated with a statement from 24 Hour Fitness related to its status, billing and its online offerings during the COVID-19 crisis.]
Complaints were filed this week seeking class action lawsuits against LA Fitness, Irvine, California, and 24 Hour Fitness, San Ramon, California. A member from each chain alleged that the health clubs continued to charge membership dues despite the clubs being closed due to the coronavirus.
Last week, a similar class action lawsuit was filed against Town Sports International by a member of its New York Sports Clubs brand.
On March 16, LA Fitness announced it would close all its locations until April 1, extending memberships to cover the time the clubs are closed, according to its website. The website now states that the closures are until further notice and that all billings have been suspended until one or more clubs in a member’s market are open.
Barnett vs. Fitness International LLC (the parent company of LA Fitness) was filed on March 30 in the Southern District of Florida by Kip Barnett, who had been a member of LA Fitness for 14 years and had paid $32.09 in March for his month-to-month contract.
The complaint alleges that Fitness International is taking advantage of the COVID-19 crisis to enrich itself, stating: “Specifically, on or about March 16, 2020, Defendant voluntarily closed its fitness facilities around the country through April 1, 2020, and furloughed most of its employees. Rather than provide a much-needed refund to its members, Defendant kept millions of dollars in unearned membership fees.”
Barnett and his attorney corresponded with Fitness International on March 23 asking for a refund of $15.52 for the remainder of the month and asking for a refund for all other members. Fitness International responded on March 27 that it was reviewing the issue, according to the complaint.
On March 30, Fitness International emails members offering extended memberships or a free three-month membership for a friend or family member “as an apology for closing its facilities earlier in the month and not refunding its members,” the complaint states.
However, the complaint states that the LA Fitness website includes a limitation of liability clause that absolves Fitness International of liability for the “unearned membership fees it is attempting to keep for this month.”
The complaint seeks a class action lawsuit as well as reimbursement of membership fees collected from March 16-March 31, as well as a guarantee that LA Fitness would not charge membership fees while its clubs are closed. It also requests awarding of damages.
LA Fitness shared this statement about what it is doing during the pandemic:
"We have kept the safety and well-being of our employees and members utmost in our minds during this crisis and have let that be our guide in making decisions. So, when we temporarily closed all of our clubs at the end of the day on March 16, our motivation was to do our part to help curb the spread of the COVID-19 virus. We hoped (like many others) that this would be a short-lived phenomenon. Once we determined that we would need to extend the temporary closure, we made the difficult and unwanted decision to temporarily furlough nearly all of our club employees. Fortunately, despite having closed every club on March 16, we will be able to continue to fully compensate every employee, whether working or not, for the entire month of March, and we will continue to provide health insurance at no cost for all current benefit holders through June 30. Once we resume operations, we plan to create a fund to financially assist eligible employees who return to work so our members can continue to see the same familiar and friendly faces.
"For our members, we have waived 'freeze' fees and suspended all billing. Some members were billed for a short period of time during which our clubs were closed. To address this, we immediately took the following steps. First, we automatically extended the membership time for all of those affected members. This means, for example, that if a member paid dues to use a club through March 31, then that member will have 15 additional days of membership time (corresponding to the 15 day period from March 17 through March 31) after their membership would have otherwise expired. Second, in appreciation of their patience during this confusion, we offered that same group of members the option to (1) take additional free membership time at the end of their membership or (2) receive complimentary three-month memberships they can give to a new member which are redeemable over the next 12 months. We began notifying members with details about these options, and explaining how these options may be selected, over this past weekend.
"Finally, we have a team of employees spread out over our clubs, who continue to field questions from members about cancellations, refunds and credit options. We are being flexible in our resolutions to meet the needs of the members. We encourage members to first check to see if their questions were resolved in the email we sent with the options explained there. If not, we have Frequently Asked Questions posted on our phone app and website. If they still have questions, they can call or email us but, again, we ask for patience as we do our best to assist everyone. The 'call back' option is recommended as we are returning messages as soon as we can over the course of the week.
"In the meantime, we’re urging all of our members to continue to take the steps necessary to keep themselves and their loved ones safe and healthy."
Brenda Labib, who has been a member of 24 Hour Fitness since 2019 and pays $46.99 per month on a month-to-month contract, filed a complaint in the U.S. District Court of Northern District of California against 24 Hour Fitness on behalf of herself and other 24 Hour members, claiming the company charged her membership dues despite temporarily closing its doors on March 17, denying her the ability to use her membership without refunding her any portion of her membership dues. She alleges that doing so is a violation of the California Consumer Legal Remedies Act, the Unfair Competition Law, the False Advertising Law and California’s Health Studio Services Contract Law.
24 Hour Fitness notified members on March 16 that its clubs would close on March 17 until further notice. In a letter at that time, CEO Tony Ueber shared that memberships would be extended for the same period the clubs are closed and that members could use the 24GO app to access workouts online for free during the shutdown.
On April 1, Ueber posted a new letter for members, stating that the clubs may need to be closed for an extended time and that, effective April 16, the company would suspend billings for memberships, additional services and fees if clubs are not open by then in a member’s area.
The letter also states: “For the membership billings that were charged from March 17 through April 15, members will receive additional days of access equal to the number of days paid for while the clubs were closed in your area. The extension will apply at the end of the membership. If you have a pre-paid membership, your end date will be extended to cover the amount of time the clubs are closed in your area.”
The Labib complaint states that 24 Hour Fitness “has made the deliberate decision to bilk its customers out of roughly $120 million per month while its customers do not have access to Defendant’s gyms.”
24 Hour told Club Industry that it does not respond to pending litigation.
However, the company provided this statement about its ongoing efforts:
"As the COVID-19 pandemic has grown in astonishing scale, 24 Hour Fitness has never wavered in its conviction that our top priority is always the health and safety of club members, team members and guests.
"On March 16, we made the difficult decision to close all our clubs, and also indicated that memberships would be extended to cover the time of club closures. Since these announcements, we’ve appreciated both the support and critical feedback about our actions. And now based on current public health projections, it appears our clubs may need to be closed for an extended period of time.
"Effective April 16, 24 Hour Fitness will suspend all membership billings, including any additional services and fees, if we are unable to reopen clubs by that time. For the membership billings charged from March 17 through April 15, members will receive additional days of club access equal to the number of days paid for while the clubs were closed in their area. That extension will apply at the end of the membership. Members with a pre-paid membership will have their membership end date extended to cover the amount of time the clubs were closed in their area.
"During this critical time for our business, our goal will continue to be focused on surviving this crisis so that we can ultimately emerge and welcome our club members, team members and guests back when it is safe to do so. However, for members who prefer to cancel their membership, visit 24hourfitness.com, click on the link and follow the instructions to submit a request to cancel. We hope members will reconsider prior to taking that step. We take pride in helping people transform their lives through fitness and that bond is even more vital now.
"While our clubs are temporarily closed, we encourage everyone to download and utilize 24GO, our personalized fitness app and visit 24GO Live, our new 24/7 workout experience broadcast on the 24 Hour Fitness YouTube Channel, among other virtual fitness solutions. We will continue to provide updates about our club reopening status, which can also be found at 24hourfitness.com."
LA Fitness ranked No. 1 on the 2019 Club Industry Top 100 Clubs list with $2.09 billion in 2018 revenue. 24 Hour Fitness ranked No. 3 on the list with $1.51 billion in 2018 revenue.