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According to the World Health Organization (WHO) and the National Highway Traffic Safety Administration (NHTSA), studies from a number of countries suggest that the proportion of drivers using mobile phones has gone up over the past five to ten years, with over 3,000 people killed in 2011. Transport Canada’s National Collision Database also reports that between 2006 and 2010, the number of fatal collisions caused by distraction increased by 17 percent.

These accidents not only harm individuals, but can also be very expensive for employers. In some cases, employers can be liable for damages. In 2012, for instance, Coca-Cola was forced to pay a $24 million settlement to a woman injured by a Coca-Cola sales person in a car accident.

Employee Crashes Can Be Costly

Any business that relies on employees driving may face liabilities if those employees are found to be negligent in an accident because they were using a cell phone. There are also hidden costs to such accidents to the business. There include:

  • Financial losses for liabilities to pay damages owed to victims of the crash
  • Increased insurance premiums
  • Workers compensation claims
  • Fines and repair costs
  • Reputational damage to the company

The NHTSA estimates that one-the-job crashes cost employers over $24,500 per crash, $128,000 per injury, and $3.8 million per fatality.

When is an Employer Likely to be Found Liable?

An employer may be found liable in a distracted driving accident in a variety of situations, including the following:

  • Vicarious Liability: When the employer is held liable for harm done by an employee acting within the scope of employment.
  • Negligent Hiring: If the employer failed to properly train the employee on avoiding distracted driving, failed to properly supervise him, or failed to perform adequate research when hiring him, the company could be liable.
  • Negligent Entrustment: If the employer had reason to know that the employee would likely be driving while distracted, the company could be liable. If the employee regularly made calls or texts while on the road, for example, as a typical method of conducting business, and then one of those times caused a crash, the company could be found to be at fault.
  • Dangerous Instrumentality: Similar to the previous doctrine, this says basically that as long as the employee caused an accident, the employer is to blame.

Will a Cell Phone Policy Help?

Many companies have drawn up cell phone policies for their employees outlining appropriate use of cell phones and other technological gadgets while on the job. These policies can be helpful in increasing the odds of remaining accident-free, but don’t necessarily protect a company from liability in a crash. In some cases, even when employees were making personal calls on personal phones, if the distraction was business related, the company can still be held liable.

In 2003, for example, a stockbroker employed by Salomon Smith Barney was driving to a non-business event when he struck and killed a 24-year-old motorcyclist. He was on personal time in a personal vehicle and using a personal cell phone, but admitted he had been making cold calls for the business. The company negotiated a settlement for $500,000.

As more states pass more laws against texting while driving or talking without a hands-free device, companies face a situation where liability is easier to prove. In states where texting while driving is banned and an employee sends or receives a text before a crash, companies even risk punitive damages.

What Are Companies to Do?

It is clear that companies are responsible for having a clear policy on cell phone use while driving, and must not encourage employees or structure work requirements to where employees feel they must multi-task in the car to get everything done. Companies must also have in place ways to enforce compliance with cell phone policies and clear punishments for those who violate the policy.

Simply having an employee sign a cell phone policy is no longer enough. Companies must show evidence of regularly communicating the rules, auditing employee behavior, and enforcing the policy and implementing consequences. In addition, adequately demonstrating that they have trained employees on the policy and created a culture condemning distracted driving will be useful in any liability case.

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