Dead Man's Curve

Risk Factors

What does all this have to do with business? Well, if one of your employees causes an accident while talking on a cell phone with a customer or checking in with the office, your company could be held liable. That's what happened in 1995 when a stock broker and financial consultant for Smith Barney Inc. in Allentown, Pennsylvania, ran a red light, crashed into a motorcycle and killed 24-year-old Michael Roberts. The stock broker was sent to prison for vehicular homicide. His employer, which encouraged employees to use cell phones while driving, agreed to a sizable out-of-court settlement.

Tom Cunningham, an attorney with Pingel & Templer in West Des Moines, Iowa, notes that your company's liability in this area is no different from its liability for other damage caused by your employees while they're working, whether due to car accidents or anything else. As long as the person is an employee (and not an independent contractor) and is acting within the scope of employment, the injured party may sue the one who caused the damage, the employer, or both. And chances are good that a lawsuit would include the employer-because companies are perceived as having "deep pockets."

If your company encourages employees to talk on the phone while driving, that could increase the damages you have to pay. Cunningham notes that some states recognize degrees of negligence, using terms such as "gross negligence" or "reckless disregard for the consequences" for conduct that's not intentional but more than merely negligent. In those states, a court or jury can assess a higher damage award because of the reckless behavior involved.

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This article was originally published in the July 2000 print edition of Entrepreneur with the headline: Dead Man's Curve.

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