Revise Your Cell-Phone Policies To Protect Your Assets

The convenience of calling from the road can bring headaches for business owners.

The number of cellular telephones in use in the United States has grown rapidly in recent years, rising from about 54 million in early 1998 to an estimated 80 million currently. As wireless telephone ownership increases, cell phones are becoming an important factor in traffic safety. According to the National Highway Traffic Safety Administration (NHTSA), fully 85% of cell-phone users make or receive calls while operating a vehicle. Comprehensive data regarding the impact of cell-phone use on safe driving is not yet available, but existing studies point to significantly increased risk of an accident when drivers use the phone while the vehicle is moving.

Concerns about the risks associated with cell-phone use while driving have spurred efforts by state and local governments to restrict the practice and to link cell-phone use with insurance and tort liability. These developments have important implications for businesses with mobile sales and service forces that rely on cell phones to keep in touch with customers and the office. Given the potential for legal headaches down the road, businesses might do well to consider implementing policies regarding cell-phone use that safeguard their drivers and their bottom line.

Safety Issues
Manufacturers of cell phones point to some very real benefits of the devices, including the ability to report accidents from the scene and to alert authorities to unsafe driving behavior and hazardous road conditions.

However, studies of the impact of cell-phone use by motorists indicate that the benefits may be counteracted by increased risks associated with drivers using the devices. A frequently cited 1997 study published in the New England Journal of Medicine found that using a cell phone while driving increased a driver's risk of involvement in an accident by four times, roughly equivalent to the impairment caused by legal intoxication. In 1999, researchers in Finland determined that cell-phone use delayed braking time one-half second on average. Those findings supported the conclusions of an earlier study by the NHTSA, which found that cell-phone use contributes substantially to driver inattentiveness, the chief cause of up to half of all traffic accidents.

Legal Developments
Several state and local governments have introduced proposals to limit the use of cell phones in moving vehicles, often in response to high-profile reports of fatal accidents in which cell-phone use was a clear contributing factor. At the local level, the towns of Brooklyn, Ohio and Marlboro, New Jersey, as well as Hilltown, Conshohocken and Lebanon in Pennsylvania have passed laws prohibiting the use of hand-held cell phones by drivers since mid-1999. Penalties include fines of up to $250 for repeat offenders. Efforts by townships to restrict cell-phone use by drivers encountered a setback in July 2000, when a Pennsylvania judge struck down the Hilltown ordinance, declaring that a local government cannot pre-empt state laws.

At the state level, only Florida, Massachusetts and California place restrictions on the use of cell phones while operating a motor vehicle. The use of a car phone is permitted in Florida provided drivers are able to hear surrounding sound through one ear. In Massachusetts, drivers are required to keep at least one hand on the steering wheel at all times and use of a cell phone may not otherwise interfere with the operation of the vehicle. California's law applies to rental cars with cellular telephones, requiring that the equipment include written operating instructions for safe use.

In 1999 alone, 15 other states introduced bills to regulate use of the devices. Proposed limitations ranged from outright bans on cell-phone use to requirements for hands-free devices or other measures intended to increase the safe use of cell phones by motorists. Although the initiatives failed in nine of the states, legislation is still pending in Georgia, Illinois, New Jersey, Pennsylvania and New York, and proposed legislation in Rhode Island has been held for further study.

One reason for hesitancy on the part of legislators is a lack of data showing a clear link between cell-phone use as a factor in traffic accidents. Only Oklahoma, Minnesota and Pennsylvania have taken steps to address this "data gap" by requiring police agencies to officially note if a cell phone contributed to an accident. However, last July, NHTSA initiated a research project on driver distractions that is expected to shed some light on the relationship between cell-phone use and the risk of an accident. As phone use by drivers continues to proliferate and more data is collected, state legislatures will be challenged to balance safety concerns against the benefits of car phones.

Liability
While politicians may be wary of establishing public policies restricting or limiting cell-phone use, civil court decisions could help to force the issue. The potential for negligence suits stemming from accidents where cell-phone use is determined to be a contributing factor continues to rise. For a business owner, an accident involving an employee could expose the company to liability.

In 1999, a prominent brokerage firm paid $500,000 to settle a case involving an employee who caused a fatal crash while using a cell phone. Although the accident occurred outside normal business hours, the driver claimed he was making a sales call to a potential client at the time of the crash. Evidence that the company had a policy that its brokers were to make sales calls outside normal business hours opened the firm up to potential liability for the accident.

The degree to which a company encounters liability problems could be influenced by its policies regarding the use of cell phones by employees. Does your company encourage its employees to conduct business from their vehicles using a cell phone? Does the company provide cell phones to employees explicitly for this purpose? Such factors could come into play down the road if an employee is involved in an accident while using a cell phone.

Does Hands-Free Mean Worry-Free?
Efforts to reduce the risk of using car phones has focused largely on requiring hands-free cell phones. Hands-free phones do minimize the risk associated with dialing. However, available evidence indicates that placing calls is not the most important component of risk associated with cell-phone use.

The 1997 study in the New England Journal of Medicine showed no significant reduction of risk associated with hands-free devices, and concluded that the conversation was the primary distraction that increased the chance of an accident. Data collected in 1998 by the National Police Agency of Japan revealed that 43% of accidents involving cell-phone use by drivers occurred when the driver was receiving a call, compared to 22% when the driver was making a call and 17% when the driver was engaged in a phone conversation.

Update Your Policies
In light of the evidence indicating the increased risk associated with cell-phone use while driving, as well as trends in legislative restrictions and the potential for liability difficulties, business owners should consider updating their policies to protect themselves before they encounter problems. Don't wait until legislation or your insurance provider requires a revision of your policies, or you find your company caught in a damaging lawsuit.

Hands-free devices can offer a short-term solution, but may not address the central issue of ensuring that drivers are operating company vehicles in a safe manner. The surest way to cover all bases is to mandate that employees wait until the vehicle is safely stopped before using a cell phone. Here are some recommendations that can facilitate implementation of such a policy.

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The MHEDA Journal • Fourth Quarter 2000 • Volume 29, No. 4 • Contents are Copyright © Data Key Communications, Inc.
All rights reserved. • Nothing may be reproduced in whole or part without written permission of the publisher.