Liability, Line One

illustration by PJ Loughran

They are sights that have become commonplace for executives in Dallas and elsewhere: the busy salesman on his cell phone making sales call after sales call while simultaneously negotiating his way on the North Dallas Tollway, the manager thumbing away at her Blackberry while at her child’s soccer game, and so on. Whether it’s simply making the most of time spent commuting or climbing the corporate ladder by being connected to the office 24/7, employees and employers alike are increasingly relying on wireless technologies to maximize productivity. But does this productivity come at a cost for companies in terms of liability exposure?

One business professor certainly thinks so. A forthcoming study co-authored by Gayle Porter, Ph.D., associate professor of management at Rutgers University School of Business at Camden, theorizes that employers who encourage such round-the-clock work connections may wind up with potential legal liability for fostering “technology addiction” among their workforce. According to Porter, courts have long recognized a special duty of companies to warn employees of dangers and to provide a safe workplace. With employers already providing programs to help workers with chemical or substance addictions, Porter believes that companies may soon have to acknowledge that addiction to technology could be just as damaging to a worker’s mental health.

THE TAKEAWAY

1. “Technology addiction” is more dangerous—and expensive—than you think. 2. Businesses have deep pockets and are ergo prime targets for liability lawsuits. 3. A cell phone usage policy may not prevent an accident, but it sure looks good in court.

The degree to which a company pressures its employees to use information and computer technology to stay connected 24/7 may prove to be crucial in determining liability. “If people work longer hours for personal enrichment, they assume the risk,” Porter says. “However, if an employer manipulates an individual’s propensity toward workaholism or technology addiction for the employer’s benefit, the legal perspective shifts.” According to Porter, when professional advancement, or even survival, seems to depend on being connected to work at all times, “it becomes increasingly difficult to distinguish between choice and manipulation.” While Porter acknowledges that courts have yet to examine this topic, she cautions that just as tobacco litigation evolved over the years, employer liability for fostering technology addiction may be in our near future.

However, liability exposure for companies arising out of their employees’ use of wireless devices is already here. With dramatic increases in the use of cell phones and other wireless technologies comes the heightened risk of driver distraction and an employer’s vicarious liability for such distraction. A growing body of research conducted in recent years has focused on driver distraction associated with cell phone use. For example, a recent study conducted by the Virginia Tech Transportation Institute tracked the behavior of the drivers of 100 vehicles in metropolitan Washington, D.C., analyzing almost 43,000 hours of video footage from multiple angles inside each vehicle. The study found that a driver reaching for an object (such as a cell phone) increased the risk of a crash or near-crash by nine times, and that the act of dialing a cell phone increases the risk of an accident almost threefold. A report in the New England Journal of Medicine found that use of a cell phone while driving actually quadruples the risk of an accident. In fact, researchers at the University of Utah have concluded that drivers distracted by cell phone use demonstrated reaction and braking times that were actually worse than motorists who were legally drunk.

With more and more accidents being attributed to the distraction of cell phone use, there has been an increase in the number of reported jury verdicts and settlements in which a driver’s employer has been held civilly liable for cell phone-related negligence under a theory of vicarious liability.

What can businesses do to protect themselves, their employees, and the public at large? While there is no ironclad defense to liability (some employers have been held liable even where a personal call was the source of distraction, if the employee was using a company vehicle or cell phone), and while the business will always be viewed as a deep pocket, a company that adapts a cell phone use policy is in a far better position to contest liability or minimize damages. Among other defenses, a business can argue that an employee not complying with its corporate cell phone usage policy is acting outside the course and scope of his or her employment.

More and more companies, faced with the risk of such vicarious liability, have established cell phone use policies. Small to medium-sized businesses, however, have perhaps an even greater need for them, since they are less capable of absorbing a catastrophic verdict. According to a 2004 study by the Society for Human Resource Management, 40 percent of responding companies already had a policy in place, and another 12 percent expected to implement one in the near future. The ranks of companies with employee cell phone use policies include Monsanto, BP, UPS, General Motors, and Verizon.

Dallas’ own ExxonMobil even used its own in-house scientists to research the issue, analyzing at least nine studies before adopting its policy in June, 2004. This policy is one of the strictest: Everyone in the oil giant’s 88,000-plus workforce is banned from using cell phones while driving on company time, including hands-free phones. Phones must contain a call-forward feature—a voicemail message advising callers that the Exxon worker is busy at the wheel. According to company spokeswoman Lauren Kerr, while ExxonMobil doesn’t have a way of monitoring this, “if an employee got into an auto accident on company time, we would check the phone records.” ExxonMobil received praise from the National Safety Council for its policy.

Cell phone usage policies differ from company to company. While some businesses ban the use of all wireless devices while driving on company time, others choose to restrict only handheld devices. General Motors, for example, recommends that its employees use hands-free devices. Other companies permit employees to conduct business over the phone, as long as they pull over to the side of the road or into a parking lot.

If the business is not prepared to ban all cell phone use entirely when in company vehicles or while on company time, consider requiring the use of hands-free devices or headsets. Emphasize company policy by posting warnings inside employer-owned vehicles and on company-issued phones and other wireless devices. A policy should require employees to pull over to the side of the road and stop safely before making or receiving calls and checking messages. Employees should be cautioned against using even hands-free devices during inclement weather, heavy traffic, or other stressful driving conditions. Also, limit the calls to brief conversations, prohibit personal calls, ban note-taking while driving, encourage the use of speed-dialing features, and forbid employees to dial or look up numbers while the car is in motion.

Of course, a policy won’t do your business much good without enforcement. Employers should require employees to sign an acknowledgment that they have read and understood the cell phone usage policy, and that they are aware of what disciplinary measures (up to and including termination) they will be subject to for violations. Besides having such an acknowledgment, companies should also consider warning employees that if they are charged with traffic violations stemming from cell phone use while driving, they will be solely responsible for dealing with such citations.

Businesses should keep in mind that training and a sound company policy on cell phone use help, but cannot guarantee that the company will not be held liable for the negligent driving of its employees while they are using cell phones. Plaintiff’s attorneys will argue that cell phone use is a necessary or encouraged part of the employee’s job, and will in all likelihood subpoena the cell phone records in an attempt to demonstrate the work-related nature of the calls, the pattern of use for business purposes, and even the timing of the particular call and the contributing cause of this distraction to the accident. Creative plaintiff’s attorneys will also assert not only that the employer is vicariously liable for the actions of its employee, but also that the company itself is directly negligent for inadequate training or supervision of its employees in cell phone use and safety issues.

While opponents of cell phone restrictions point out, quite correctly, that drivers should be educated about the effects of all driver distractions, cell phone use is something that lends itself to being regulated more easily than other sources of driver distraction, like the person walking down the street or the screaming kids in the back seat. With the unprecedented growth in the numbers of subscribers to cell phones and other wireless technologies, and the ever-growing body of research documenting the dangers associated with cell phone use, the convenience and added productivity afforded by these devices have to be weighed against the hazards that they pose. Consider a cell phone use policy—the life you save may be your company’s.

Recent Lawsuits Involving Cell Phones

In 1999, investment firm Salomon Smith Barney paid $500,000 to settle a Pennsylvania case in which one of its stockbrokers struck and killed a motorcyclist. The stockbroker, Robert Tarone, was on his way to a non-business dinner but was purportedly making “cold calls” en route. While Smith Barney denied that Tarone was in the course and scope of his employment and denied providing any cell phones to employees, other employees testified that the use of a cell phone was encouraged by the firm and that making “cold calls,” even on personal time, was expected of Smith Barney brokers.

In Miami-Dade County, Florida, Arkansas-based lumber giant Dykes Industries was hit with a $21 million verdict after a 78-year-old woman is struck (and later dies) by a Dykes salesman using a cell phone to make a sales call while driving to an appointment.

In December 2004, construction company Beers Skanska paid $5 million to settle claims arising out of a Georgia chain-reaction crash, allegedly caused by the inattention of an employee who was retrieving messages from a cell phone.

In a highly publicized case, the Virginia office of Palo Alto-based law firm Cooley Godward, L.L.P. settled a multimillion dollar wrongful death suit. In March 2000, a young associate of the firm, allegedly distracted by a cell phone conversation with a client, struck and killed a teenage pedestrian. The attorney, who fled the scene, ultimately lost her law license, served a year in jail, and had a $2 million civil judgment entered against her.