The Impact of Motors & Mobiles

On the morning of Jan. 25, 2010, it was clear and sunny as Davian Bennett, a field technician for a cable company, drove his work truck over the crest of a hill on U.S. Highway 82 just north of Savoy, Texas. About a quarter of a mile ahead of him, 31-year-old Mindy Ragsdale was waiting for traffic to clear so she could make a left turn from the two-lane highway onto a county road. With her in her white sedan were her 82-year-old grandmother, Peggye Woodson, and her 3-year-old son, Cody.

Bennett had plenty of time to come to a stop behind Woodson’s vehicle. But traveling at 71 mph with his cruise control on, he plowed into its rear, causing it to flip over. The impact killed both Woodson and Ragsdale, a mother of two; the child suffered a broken leg. The white sedan was reduced to a heap of mangled metal. Asked by a paramedic if he remembered what had happened, Bennett replied, “I was texting before the accident.”

Woodson and Ragsdale were two more victims of cellphone-related distracted driving, a phenomenon that has not only imperiled the safety of motorists but also the balance sheets of corporate America. A year after the tragedy on Highway 82, Bennett’s employer, Cable One Inc., reached a confidential settlement of a wrongful-death lawsuit brought by the victims’ families. Cable One officials had admitted they had no policy for employees addressing mobile phone use while driving.

“These were people who were just blind, blind to safety,” says the plaintiffs’ lawyer, Todd Clement of Dallas.

Plaintiffs’ attorneys across the country have won similar settlements and jury verdicts in distracted driving cases against employers. If the employee was using a mobile phone for business purposes while within the course of employment, the employer can be held indirectly, or “vicariously,” liable. In one of the largest verdicts of its kind, a jury in 2001 awarded $21 million against Dyke Industries Inc., an Arkansas lumber company, finding it liable for an accident caused by a salesman who was talking on his cellphone while driving to a sales appointment.

According to ZoomSafer Inc., a developer of safe driving software for mobile phones, 7.6 percent of the companies it surveyed have faced litigation resulting from injuries allegedly caused by employee use of cellphones while driving. Of those companies with more than 5,000 drivers, 37 percent have been sued.

Given the risk of vicarious liability, the best defense is a powerful offense. That means acting pre-emptively by drafting a corporate policy against mobile phone use while driving on company business. A recent survey by ZoomSafer found that 62 percent of U.S. companies have indeed adopted such prohibitions, but of those companies with policies, only 53 percent make any attempt to enforce compliance. “It’s inconvenient to have to enforce” a policy because employees’ use of cell phones often benefits the company, Clement says.

One of the earliest major cases involving a distracted employee using a cellphone dates back more than a decade. On March 8, 2000, Naeun Yoon, 15, was walking on the shoulder of a Fairfax County, Virginia, highway when she was struck by a Mercedes being driven by Jane Wagner, a lawyer with the law firm that was then known as Cooley Godward, who was on her cellphone. Yoon’s parents alleged in a $30 million wrongful-death lawsuit that Wagner routinely made as many as 40 mobile phone calls a day “with the expectation and acquiescence of Cooley Godward,” and the calls “served as a direct benefit” to the law firm. The case against Cooley Godward was settled before trial for an undisclosed amount.

Peter Grenier, of the law firm Bode & Grenier in Washington, D.C., was the lawyer for Yoon’s parents. He recalls that the case “generated a lot of media attention,” even inspiring General Motors Co. to put together an animated film for employees that depicted the dangers of driving while using a cellphone. “From my perspective, it was a very significant case in the eyes of the law, and employers locally and nationally,” Grenier says.

Nine states and the District of Columbia now prohibit all drivers from using hand-held cellphones while driving. In addition, 34 states and the district ban text messaging for all drivers. Earlier this year, the Occupational Safety & Health Administration announced that employers will be required to pay fines for employees found to have been texting while driving on the job, and in 2009, President Barack Obama issued an executive order banning all federal employees from text messaging while driving.

Yet when Grenier commutes to and from his district office, he sees other drivers busily talking and text messaging on their handheld cellphones. “It’s disgusting to me,” he fumes. “Do you really think they’re talking to their child? You know it’s probably related to work.” Nationwide Mutual Insurance Co. reported in 2008 that 81 percent of cellphone subscribers talk on their cellphone while driving. Eighteen percent send text messages while driving.

In a recent survey, CTIA, the cellular industry’s main trade group, found that more than 285 million Americans are mobile subscribers, about 91 percent of the total population. “The modern member of our society has an insatiable appetite for the modern Web,” says Matt Howard, co-founder and CEO of ZoomSafer, which is based in Herndon, Virginia. Cellphone use, he adds, “doesn’t change in the context of the driving experience. The phone is still fun. It’s just as much fun to update Facebook when driving as when standing still.”

In the business world, cellphones have enabled employers to stay in constant contact with employees who are on the road. A dispatcher, for example, can instantly notify a delivery driver of a route change. On-the-road employees can use their driving time to take care of company business, thus, at least in theory, boosting productivity. “Salespeople make sales calls,” says Stephen Schatz, a partner in the law firm of Swift, Currie, McGhee & Hiers in Atlanta who represented an employer in a distracted driving case. “It’s how they make their commissions, how they make money for the company.” Lawyers can catch up with clients, and executives can do interviews with reporters working on stories.

But all this communication has been to the detriment of road safety. In a seminal study published by the New England Journal of Medicine in 1997, two researchers concluded that the relative risk of driving while using a cellphone “is similar to the hazard associated with driving with a blood alcohol level at the legal limit.” A 2003 study went even further, finding that “cellphone drivers may actually exhibit greater impairments … than legally intoxicated drivers.” According to the National Safety Council, at least 28 percent of all traffic crashes—or at least 1.6 million crashes each year—involve drivers either talking on cellphones or texting while using them.

“Driving while distracted is the DWI of the 21st century,” Clement says.

In the event that a cellphone-related crash leads to a lawsuit against an employer, the law provides the victim’s representatives with a potent weapon. Vicarious liability is also known as “respondeat superior” (“let the master respond”). The doctrine holds an employer liable for the actions of an employee if the employee was acting “within the scope of his or her employment at the time of the accident.” Cellphone-related negligent driving cases, Schatz says, usually boil down to two factual questions: Was the employee on a cellphone at the time of accident? And if so, was the employee using the phone for business purposes?

Schatz was the defense lawyer in a case resulting from a collision at an Atlanta intersection in 2003. The plaintiff, Pamela Hunter, alleged that Modern Continental Construction Co. was liable for the injuries she suffered when a truck driven by a shift supervisor, Jeffrey Stasium, ran into her vehicle. Stasium was on his way to work but a Georgia appeals court ruled in 2007 that the commuting exception to the “respondeat superior” rule did not apply because there was “evidence showing that Stasium may have been on his cellphone regarding company business when the accident occurred.”

Telephone records, Schatz says, show that Stasium ended his call to a co-worker three to four minutes before a bystander called 911 to report the collision. Nevertheless, while the jury was deliberating, Modern Continental agreed to pay Hunter $750,000 rather than risk a jury verdict. In the Yoon case in 2000, the fatal crash occurred outside Wagner’s business hours but she was speaking on a cellphone to a client.

In other high-profile cases:

• International Paper Co. paid a $5.2 million settlement after an employee rear-ended a vehicle on a Georgia interstate in 2006 while allegedly using a cellphone.

• Beers Skanska Inc., a construction company, paid a plaintiff $4.75 million to settle a case over a cellphone-related accident that occurred in 2002 in Forsyth County, Georgia.

• Smith Barney paid a $500,000 settlement after a broker who was allegedly trying to make a sales call on his cellphone ran a traffic signal and killed a 24-year old motorcyclist in Allentown, Pennsylvania, in 1995.

“You can’t divorce [this type of case] from vicarious liability,” Grenier says. “You don’t use a cellphone for a business-related purpose while driving.”

Part of Clement’s strategy in his case against Cable One was to hammer away at the company’s failure to adopt a definitive cellphone policy. “We don’t think that’s respectful to our associates or reasonable in this day and age to ban communications,” Janice St. Cyr, the company’s vice president for human resources, testified in a deposition. “We trust our associates to have really great judgment.”

“If the evidence in this case establishes that Davian Bennett was texting before this collision, in other words, that it contributed to this collision, would you agree that he used good judgment?” Clement asked.

“I would be surprised,” St. Cyr replied. “I’ve never heard of any of our associates texting and driving. I think texting and driving is a bad decision.”

Clement says a “way to create real value” in a cellphone-related negligent driving case “is to have a scenario which really implicates the company for not having appropriate policies. … You create a scenario where the jury is extremely angry with the company.” That anger, he says, could translate into a higher award of compensatory damages and even an award of punitive damages. Cable One, which is based in Phoenix, settled two weeks before trial. “Most of these [cases] are getting settled,” Clement notes. “This is not something employers want to go to trial.”

Even having a policy in place, lawyers say, is not necessarily enough to shield an employer from a damages award. “It’s one little arrow in the employer’s quiver,” Grenier says. “But it’s not a very sharp or powerful arrow.” According to Clement, the only thing that can really help employers in court is if they have taken effective steps to enforce a cellphone policy. “The jury is not going to get mad at the company,” he explains. “It’s not as good a case [for the plaintiff] if just the employee is culpable. The easier case is when you’ve got a culpable employee and a culpable employer.”

ZoomSafer’s statistics showing that only about a half of companies with cellphone policies actually enforce them come as no surprise to Jack Hanley, executive director of the Network of Employers for Traffic Safety. He says some companies would rather pay “lip service” to the dangers of distracted driving than enforce a policy that they believe will reduce productivity and alienate cellphone-dependent employees. “Many companies view it as a matter of probability,” he observes. “Why spend a bunch of money on a road safety program when accidents are going to happen?”

But Hanley also believes that the distracted driving lawsuits, and the publicity surrounding them, have had a “chilling effect” on employers. “Dangerous driving can do a lot of damage to the brand image that a company is trying to develop,” he says. At ZoomSafer, Howard predicts that “Slowly but surely, the risk managers, the attorneys … [will persuade] corporate America that using a cellphone in the course of employment is just plain risky behavior and the costs associated with that outweigh any potential loss in productivity.” In 2009, the National Safety Council reported that 99 percent of companies that completely banned cellphone use while driving experienced no decrease in productivity.

“Is it really worth risking a million bucks?” Clement asks, noting that many small businesses carry liability insurance with a $1 million deductible. “They’re literally playing with company money.”

Employers now have a broad menu of enforcement options and mechanisms. Clement, who travels across the country speaking to employer groups, says enforcement can begin with training dispatchers to recognize when an employee is talking on a cellphone while driving. Employers can also station security patrols strategically so they can spot whether employees going to and from the workplace are on a cellphone.

For those willing to invest in more high-tech methods, ZoomSafer, Illume Software Inc. of Needham, Massachusetts, and other companies offer software that employers can install in cellphones to prevent employees from calling or texting while their vehicle is in motion. Companies that have a “telematics” system, which tracks drivers’ movements and records driver behavior, can also buy software that compares the telematics to the employee’s cellphone records. “If you want to manage it, it’s not enough to do it on paper,” Howard says. “You need an enforcement solution.”

But according to ZoomSafer’s own research, only 2 percent of companies that enforce compliance use technology as part of their enforcement package. Instead, 61 percent of companies rely on disciplining employees after they have been involved in a cellphone-related accident—the very opposite of pre-emption.

Hanley argues that to address the distracted driving problem effectively, employers need to go beyond the superficial and make driver safety part of their corporate culture. “A policy … does little or nothing unless it’s built into the fiber of a safety program,” he says. “You have to ingrain in the corporate DNA that safety is front and center every step of the way.” That means distracted driving education and training not only for employees who drive as part of their routine job duties but also those who only use vehicles to commute to and from work.

Hanley says there should be “zero tolerance” for employees who violate the cellphone policy. “If your employer catches you using a cell phone,” he says, “you have chosen to no longer work for that employer.”

Workforce Management, November 2011, pgs. 16-20 — Subscribe Now!