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Employer Liability for Distracted Driving Accidents Why Simply Having a Cell Phone Policy is Not Enough Whitepaper DISTRACTED DRIVING SAFETY SOLUTIONS www.kyrusmobile.com

Employer Liability for Distracted Driving Accidents

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Page 1: Employer Liability for Distracted Driving Accidents

Employer Liability forDistracted Driving Accidents

Why Simply Having a Cell Phone Policy is Not Enough

Whitepaper

DISTRACTED DRIVING SAFETY SOLUTIONS

www.kyrusmobile.com

Page 2: Employer Liability for Distracted Driving Accidents

Introduction

Employers can and have been held liable for the actions of their employees. This includes lawsuits for negligence due to cell phone usage while driving. This white paper addresses why businesses should – and must care.

This paper:

• Discusses various legal theories of employer liability, including respondeat superior, or vicarious responsibility, which says that an employer can be held legally responsible for negligent actions of their employees, as well as other ways employers can be found liable. This liability exists even if the accident occurs in a jurisdiction that hasn’t yet specificallybannedtextingwhiledriving.

• Addresses some misperceptions and misunderstandings, for example, the fact that employers can still be held liable, even when employees are using their personal phones or driving their own cars.

• Reviewsafewhighprofilecases,includingacasefromTexasin2012whereCoca-Colawasforcedtopaya$24millionsettlementtoawomanwhowasinjuredbyaCoca-Colasalespersoninacaraccident.

• Describeswhylawsagainsttexting-while-drivingmayactuallymakesituationsworsefor employers.

• Explains why although implementing a phone use policy can help, employers cannot rely on simply having a policy as a defense.

DISTRACTED DRIVING SAFETY SOLUTIONS

www.kyrusmobile.com 1 (617) 399-1010

KyrusMobilepreventsdistracteddrivingbyemployeestoreduceriskandminimizecompanyliability. Rolling out a policy to prohibit cell phone usage while driving is not enough; employers must demonstrate that they have been actively monitoring and enforcing the policy. With the distracted driving solution from Kyrus Mobile, employers can demonstrate that they not only prohibited, but also actually prevented, employee usage of mobile devices while driving.

Page 3: Employer Liability for Distracted Driving Accidents

The Problem - Overview

Distracteddrivingisaseriousproblem,attributablefor28%ofallcrashesintheU.S.onanannualbasis.Thisamountsto1.6millioncrashes,causing636,000injuriesand10,000deathsannually1.Atleast170,000crashes annually are directly attributable to the use of texting while driving. The rapidly rising adoption of smartphonesmeanmoredriversthaneverareequippedwithahugelydistractingdeviceattheirfingertips,especiallyasmoreandmoreemployeesusethemforworkona24/7basis.

 

AccordingtotheNationalHighwayTrafficSafetyAdministration(NHTSA),80%ofcrashes are caused by driver inattention, and by far the biggest source of this is cellphoneuse,with11%ofalldriversusingphonesatanygiventime.2 Drivers distractedbyamobiledevicearefourtimesmorelikelytohaveanaccident,whilecommercialtruckdriversareanastounding23timesmorelikelytocrash.3

 

AccordingtotheNationalSafetyCouncil(NSC),mostdriversbelievetheyaremoreskilledthanotherdriverswhenitcomestomultitaskingwhiledriving.TheNSCalsosaysthatmulti-taskingisamyth.“Ourbrainsflipquicklybetweenonetaskandanother.Whilewemaythinkwecandotwotasksatonetime,becausewe’rerequiringourbrainstoswitchbetweenmultipletasks,weactuallyfaceacompromiseordegradationinperformance.”Lastly,justlikeitisinstinctivetoanswer a ringing phone, it is becoming more and more instinctive and second nature to reply to an incoming text or email immediately.

What Are the Costs to Employers?

Enterprises–notonlyfleetoperatorsbutanybusinessforwhichemployees use phones while driving – face liabilities in the form of financiallosses(suchaslegaljudgments,increasedinsurancepre-miums,workerscompensationsclaims,finesandrepaircosts),andalsoreputationalrisktothefirmandbusinessrisk(e.g., damaged company vehicles which can result in slowed operations or failure toprovidecontractualservicesorproducts).

Astoundingly,NHTSAestimatedthaton-the-jobcrashescostemployersover$24,500percrash,$128,000perinjury,and$3.8million per fatality.4 These numbers are the sum of direct and in-directcostsresultingfromacrash.Thecostofacrashcanbebrokendownbythetypeofcrash--whetherit’s only property damage, an injury is suffered, or a fatality occurs. The weighted average of all types of crashes(calculatingthefrequencythatcrashesresultinaninjuryorfatality)is$53,469.

Forfurtherinformationonthistopic,aswellasaneasy-to-usecalculatortodeterminewhatyourcompany’scostsarefromdistracteddriving–andhowmuchyoucansave–pleaseseeourROICalculator,availableonourcompanywebsiteatwww.kyrusmobile.com.

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1NationalSafetyCouncil,“Summaryof2009AttributableRiskEstimateModel(CellPhones&Texting)”http://www.nsc.org/news_resources/Resources/Documents/NSC%20Estimate%20Summary.pdf.

2USDepartmentofTransportation,“StatisticsandFactsAboutDistractedDriving.”3Ibid.4NationalHighwayTrafficSafetyAdministration,“TheEconomicBurdenofTrafficCrashesonEmployers”http://www.nhtsa.gov/people/injury/airbags/EconomicBurden/.

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The Basis for Employer Liability from Employee-Caused Accidents

There are a variety of different legal theories under which the employer may be found liable for the actions of an employee:

Vicarious Liability: The most common is vicarious liability for Respondeat Superior,whichsaysamaster(theemployer)canbeheldresponsibleforharmdonebyitsservant(anemployeeactingwithinthescopeofemploy-ment).Thisappliesbothtoemployeesandindependentcontractors,solong as there is an agency relationship.

Thereisarequirementthattheemployee’sactionswereinthescopeofemployment.Adrivermakingdeliv-eries, as one example, is clearly acting within the scope of employment. The more ambiguous cases arise whenanemployeeiscommutingtowork,orusingcompanyequipmentonpersonaltime(discussedbelow),butcourtshavedefined“scopeofemployment”verybroadlyinthecontextofdistracteddrivingcases.

Theplaintiff’sattorneywillnothavetoshowthattheemployershouldhaveknowntheemployeemightcauseharm,oreventhattheemployerdidanythingdemonstrablywrong.Iftheemployeecausedtheinjurywhileactingwithinthescopeofemployment,theemployerwillbeonthehookfordamagesincurredbythevictim– this means that regardless of the employer’s best intentions, or policies put into place, if the employee causes an accident due to distracted driving while in the scope of her or his employment, the liability will tracebacktotheemployer.

Negligent Hiring, Supervision & Retention:Anotherlegaldoctrinethatmaybeapplicableisknownalter-natively as negligent hiring, negligent hiring and retention, or negligent supervision. A majority of states now recognizethisasacauseofaction.

There are three elements required for liability to attach to the employer. First, employers that hire employ-eesmusttraintheminallforeseeablespecificjobresponsibilities,ifthefailuretodosocouldresultinharm.Thus, employees who will be operating a vehicle as part of their jobs must be trained to do so properly – includingavoidingdistracteddriving–sincetheriskisclearlyforeseeable.Second,theemployerhasadutytoproperlyhire,trainandsuperviseemployees.Iftheemployerfailstodoso,itbreachesthatduty.Lastly, there has to be causation between the conduct and the injury, which is usually not at question in thesetypesofcases.Byvirtueofemployeesusingmobiledeviceswhiledriving,theemployerwillhavebreached its duty to supervise its employees and thus be held liable to the accident victims.

Negligent Entrustment: This is a rapidly growing tort that usually arises in cases of vehicle accidents. Incommercialautomobileoperations,acaseof“negligententrustment”ariseswhentheemployerallowsanemployeetouseavehicleknowing,orhavingreasontoknow,thattheuseofthevehiclebytheemployeecreatesariskofharmtoothers.Therequirementtofocusonhereiswheretheemployerhasreasontoknow(orshouldhaveknown)thattheemployeewouldhavealikelihoodofdistracteddriving.Evidencewouldtypicallyincludetheemployeemakingcallswithotheremployeesorcustomers,orrespondingtotextsoremailswhiledrivingduringbusinesshours.Becausethisdoctrineissostraightforward,manyplaintiffs’attorneyswillmakethisclaimbecausethereisnorequirementthatthedrivingiswithinthescopeof employment. The employer may be found liable if the distracted driving was caused by a personal call on personal time, but while operating a company vehicle.

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© 2012 Kyrus Mobile, LLC

2USDepartmentofTransportation,“StatisticsandFactsAboutDistractedDriving.”3Ibid.4NationalHighwayTrafficSafetyAdministration,“TheEconomicBurdenofTrafficCrashesonEmployers”http://www.nhtsa.gov/people/injury/airbags/EconomicBurden/.

 

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Dangerous Instrumentality:Currently,thisdoctrineisuniquetotheStateofFlorida,butplaintiffs’attor-neysinotherstatesarestillassertingitasabasisofliability,inthehopesofgettingthisdoctrinerecognizedelsewhere.TheDangerousInstrumentalitydoctrineisanoutgrowthofNegligentEntrustment,withthe differencebeingthatliabilityisnow“strictliability”–theplaintiffisnolongerrequiredtoshoweitheractualknowledgeorevenconstructiveknowledgeonthepartoftheemployerthattheemployeewouldhavealikeli-hoodofdistracteddriving.Solongastheemployeecausedanaccident,theemployerwouldbeonthehook.

Employer Liability Exists Even in Unexpected Circumstances

Underthesevariouslegaltheories,itisclearthatifavehicleaccidentoccurs,therearemanywaysthatemployerswillbefoundliable.Companiesandtheirinsurers,includingpharmaceuticalcompanies,broker-ages,truckingandevenlawfirmshavepaidouthundredsofmillionsofdollarsinlawsuitsettlementsandjudgments for these accidents. Liability has been found even when employers have had cell phone policies inplace;whendriversofcompanycarswereonpersonalerrands;whenemployeeweremakingpersonalcalls on company supplied phones; and even when employees were using personal phones and driving per-sonalcars,whenthedistractionwasbusiness-related.

• InTexasin2012:TheCoca-Colacompanypaid$24million($14millionincompensatoryand$10Millioninpunitivedamages)towomaninjuredbyaCoca-Colasalesemployeedrivingacompa-nycarandusingahands-freedevice.ThecourtheldthateventhoughCoca-Colahadapolicyinplace,thatpolicyalonewasinsufficientasadefenseandCoca-Colawasnegligent.

• AlsoinTexas,in2010,aCableOnetechniciandrovehisworktruckintoastoppedvehicleat71mph,killingamotherandagrandmother.Thetechnicianadmitted,“Iwastextingbeforetheaccident.”CableOnesettledthecaseforaconfidentialamount,butitislikelytobeinthe8-figurerange.

• InFlorida,thewidowofaJamesL.Caskey,Jr.,abicyclistkilledbyatextingdriver,broughtasuitinApril2010againstAstellaPharmasUSInc.,allegingthattheiremployee,apharmaceuticalrepresentative,wastextingwhenhestruckandkilledCaskey.

• In2010,aninsurancecarrieragreedtopay$5milliontothewidowofThomasHoskins,oneoftwobicy-clistskilledbydriverSharonKing.Theotherdeathwassettledfor$2.5million.Kingwasdrivingacompanycar.Althoughthecompanyarguedthatshewasnotworkingwhentheaccidentoccurred,thecompany’sinsurance company concluded that it might nevertheless be found liable and decided to settle the case.

• Tiburziv.HolmesTransport(Missouri,Aug2009)–an$18millionverdictfortheplaintiffwhosustainedseriousbraininjuryafterbeingstruckbyan18-wheeltruckthatwasdrivenbyanemployeeofthe defendant.Thejudgefoundthatatthetimeoftheaccident,thetruckdriverwascheckingmessages on his phone. Holmes Transport was liable under the theory of vicarious responsibility.

• Bustosv.Leivaetal–(Florida,2001)–a$21millionverdict,whereanelderlywomanwasstruckbyatruckdrivenbyanemployeeoflumbergiantDykeIndustries.Theemployee’scellphonerecordsprovedthathehadbeenusinghisphoneatthetimethecrashoccurred.Dykeindustrieswasheldliableunderthetheoryofvicariousresponsibility.Thecasewassubsequentlysettledfor$16.2million.

• Robertsv.SmithBarney,Inc.(Pennsylvania,2003)–a$500,000settlement,astockbrokeremployedbySalomonSmithBarneywasdrivingtoanon-businesseventwhenhestruckandkilleda24year-old motorcyclist.Thestockbrokerwasonpersonaltime,inapersonalvehicleandusingapersonalcellphone,butadmittedthathehadbeenmaking“coldcalls,”acommonpracticeatthefirm.SalomonSmithBarneyrecognizedthatinpermittingandexpectingitsemployeestomakecoldcallswhile driving, the company policy itself could be deemed negligent and was forced to settle the case.

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Page 6: Employer Liability for Distracted Driving Accidents

• Fordv.InternationalPaperCo.(Fulton,Georgia,2008)–DebraFordbroughtapersonalinjuryclaimagainstVanessaMcGrogan,anemployeeofInternationalPaper,allegingthatMcGroganwasusingacompany-suppliedcellphonewhensherearendedFord’scar.Ford,awidowedmotheroffour,hadherarmamputated.InternationalPaperarguedthatGeorgialawrequiresdriversnottodothingsthataredistracting.Ford’sattorneyssaidthatMcGrogan’scellphoneusewasnotreasonable.EventhoughInternationalPaperhadacellphonepolicythatprohibitedtheiruse,thecompanyneverthelessagreedtosettlethecasefor$5.2million.

• In2001,JaneWagner,alawyerwithinternationallawfirmCooleyGodward,struckandkilleda15yearoldgirlinNorthernVirginiawhenshewasdrivinghomefromworkandconductingabusinesscallonhercellphone.Thejuryawarded$30millionagainstCooleyGodward.Thelawfirmendedupsettlingforan undisclosed amount.

Laws Against Texting-While-Driving Exacerbate the Situation for Employers

AsofJuly2012,thirty-ninestatesandeightCanadianprovinceshaveenactedbansontextingwhiledriving.As well, federal regulations ban it for commercial drivers and government employees. The reality is, how-ever, these new laws have not diminished the number of people texting and have even slightly increased the numberofaccidents.Itisverydifficulttoenforcetheselaws.Policedepartmentsadmitthatenforcementisdifficultorimpossible.TheGovernorsHighwaySafetyAssociationstates:“Therealityofitis,wedon’thavea good way to enforce texting bans yet.5“Worse,theHighwayLossDataInstitutereportsthattheselawshave not resulted in fewer vehicle crashes.6

Statisticsaside,iftheemployerdoesnotoperateinoneofthosestatesthathavebannedthepractice,does that mean there is no liability? Not at all. Whether a driver is negligent in his or her driving is a ques-tionoffacttobedeterminedincourt,regardlessofwhetherit’slegallypermissibleornot.Ironically,therapidenactmentoftheselawsactuallymakesthesituationworseforemployers.

Notonlyisiteasiertoprovenegligenceinthosestates,theselawsbanningtextingwhiledrivingmakeitmuch easier for plaintiffs to claim – and get – punitive damages. The violation of such laws goes to show recklessandoutrageousindifferencetoahighlyunreasonableriskofharm,greatlyincreasingthechancesthat punitive damages will be awarded.

New Government Regulations Increase the Cost

AssistantSecretaryofLaborforOSHADavidMichaelspubliclyannouncedtoemployers,“Itisyourrespon-sibility and legal obligation to have a clear, unequivocal and enforced policy against texting while driving… CompaniesareinviolationoftheOccupationalSafetyandHealthActif,bypolicyorpractice,theyrequiretextingwhiledriving,orcreateincentivesthatencourageorcondoneit,ortheystructureworksothattextingisapracticalnecessityforworkerstocarryouttheirjobs.OSHAwillinvestigateworkercomplaints,and employers who violate the law will be subject to citations and penalties.” 7

OSHAhasproclaimedthatitwilluseitsGeneralDutyClause,Section5(a)(1)oftheOccupationalSafetyandHealthAct,toissuecitationsandproposedpenaltiesinthesecircumstances.OSHAconsiders“distracteddriving”whichcanincludetextingandtheuseofcellphonesfortelephonecallstobea“recognizedhazard”undertheGeneralDutyClausetoemployeesafety.PenaltiesforwillfulviolationsoftheActundertheGeneralDutyClausecanbeashighas$70,000.

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5GovernorsHighwaySafetyAssociationwebsite,http://www.ghsa.org/6“Study:Cellphonebansdon’treduceaccidents,”CNN.com,http://articles.cnn.com/2010-01-29/us/cellphone.study_1_cell-phone-bans-hands-free-devices-texting?_s=PM:US

7USLaborDepartment’sOSHAreachesouttopreventdistracteddriving”,Oct4,2010http://www.osha.gov/pls/oshaweb/owadisp.show_document?p_table=NEWS_RELEASES&p_id=18432

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TheFederalMotorCarrierSafetyAdministration(FMCSA),inpartner-ship with state regulatory agencies andindustries,usesitsCompliance,Safety,Accountability(CSA)programto increase compliance with safety rules.TheFMCSAannouncednewrulesinNovemberof2011thatrestricttheuseofhand-heldmobilephonesbydriversofcommercialmotorvehicles,modifydisqualificationsanctionsfordriverswhofailtocomplywitheitherFMCSAregulationsorstatelawsthatrestricttheuseofhand-heldmobilephoneswhiledriving,andprohibitcarriersfromrequiringorallowingCMVdriverstousehand-heldmobiletelephones.Aspenalties,theFMCSAhasannouncedthattheyareissuingemployerfinesofupto$11,000andfiningdriversupto$2,750,inadditiontorevokingtheirlicenses.

Implementing a Phone Policy Does Not Absolve Employers of Liability

Although many companies are rolling out policies banning phone use, enforcement is ineffective, as punishments typically occur only after an accident has happened. Nearly86%ofcompanieshavepoliciesregardingtheuseofmobiledeviceswhiledriving but few, if any, have procedures in place to enforce these policies.

While implementing a policy will help, just having a policy in place is not an absolute shieldagainstliability.Indeed,the$24MverdictagainstCoca-Colademonstratesthatemployerswillbefound liable, even with a properly worded phone use policy in place. The missing piece for most employers is the enforcement and auditing of these policies. Without that, policies may be deemed to be just boilerplate paperworkthatemployeesblindlysignwithoutevenreadingit,muchlessunderstandingtherealrisksinvolved.

IraLeesfield,anotedtrialattorney,statesthat“Lastly,eveniftheemployerhadapolicythatbannedtheuseofcellphonesforbusiness-relatedpurposeswhiledriving,iftheydidnothingtoensurethatthesepoliciesare adequately communicated to its employees, they can still be held liable. The ‘ostrich with its head in thesand’isneveragooddefense.Inadditiontopoliciesandprocedures,employerswillbewellservedbydemonstratingthattheyhaveproperlytrainedemployeesonitspolicyandcreatedanofficeculturethatcondemnsthiskindofrecklessbehavior.”

Withoutauditingandcompliancemonitoring,employerseffectivelyhavenowayofknowingifphoneusehasstopped – until after the next accident has already happened.

Companiesthataren’tactivelypreventingdistracteddrivingdon’tneedtoaskIFthiswillhappen...theyneedtoaskWHEN.

Summary

Insummary,employersfacehugeriskeverydayforthenegligentactionsoftheiremployeeswithregardtocellphoneuse.Itisnotenoughtosimplyhaveapolicy,thecompanymustdemonstratethattheydideverything in their power to monitor their employees and enforce compliance with the cell phone policy.

Therearetechnologiesonthemarkettodaythatarecapableofdisablingcellphoneswhenavehicleis moving and returning service when the vehicle has stopped. These solutions are a critical part of the enforcement and auditing requirements. The temptation to respond to cell phone distractions is just too great to leave it up to the employee. Responsible employers will remove the distraction to assure the highest levels of safety.

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