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Death by Phone

General Business News

July 2003

Death by Phone

The technology of the information age has been a boon to many of us modern day business folk. You can walk into your office, check out the e-mail for any new orders or an answer to the proposal you made last night, hit the forward arrow and send the order to shipping and then start making your phone calls or sending your e-mails to prospects. You're not worried about missing an important call when you're out of the office because you have your handy cell phone with you. When it’s late, you’re still working and the kids are about to go to sleep, just flip on the video cell phone and tell the kids goodnight. Shoot, even on your way home at night, you can still call your Hong Kong supplier from the car. There’s nothing stopping you from doing business 24/7 and your profits show it!

Oh, there’s just one tiny little catch to this picture. You know that cell phone you’re using in the car…well, it seems there’s a few folks out there who don’t think it’s quite right to drive and talk at the same time. In fact, there have been studies that show a higher rate, or potentially higher rate, of accidents caused by inattention when using a cell phone. Don’t look so smug, they included hands-free phones in the studies and found they’re dangerous too.

Attorneys call these folks "plaintiffs" and they are a group of people who are growing daily. So you heard about those studies and stopped using the cell phone in the car? That’s great, but what about your employees? Are you an employer who provides cell phones to your employees or permits the use of cell phones for business purposes in the car? Do you have a policy, even an unwritten policy, that permits or requires employees to use cell phones for business?

If so, we first suggest that you don’t voluntarily tell your insurance company about the risks you’re taking (If your agent asks, though, don’t lie.). Second, we suggest you get to work on a very strong cell phone policy to protect yourself.

How bad can it be? Ask the folks at Dykes Industries about the $21 million judgment slapped against them when one of their drivers hit another vehicle while talking on the cell phone. It was lucky for them that they were able to settle for only $6 million later on since the insurance limits were $16 million.

Did you hear about the $30 million suit against a law firm because one of its employees was talking business on the cell phone when she killed a teenager on a bicycle? How about Hawaii paying $2.5 million to cover it’s share liability when an employee hit a tourist in New Jersey?

Folks, this is just the beginning of litigation against not only the drivers, but the employers of those drivers when they are conducting business on a cell phone on your behalf. It doesn’t even have to be during normal business hours. A good attorney is going to go after your employee and you.
Here are some realities:

  • Employers can be held liable for personal injury created by the employee’s use of a cell phone while driving on business if the company provides the cell phone or if cell phone use is considered necessary to perform that employee’s job.

  • It doesn’t matter if the call was for business or personal purposes.

  • Third parties or even your employee can sue you.

  • Employers are now being sued by employees for alleged health problems caused by the radio emissions from cell phones, even though the scientific evidence for this is shaky.

Great! Now even making a simple phone call can crater your business in a nightmare scenario. How am I going to get out of that, you wonder. Your employees have to be able to call the clients, don’t they?

What with living in the information age, your employees better be available when the customers call or you may lose those customers. We wouldn’t suggest otherwise, but we will suggest a few practical steps to protect yourself and we are going to start with company policy.

A strong company policy is not a panacea and it doesn’t even need to be just for liability purposes. First, you need to look at how employees are currently using the cell phone. Do they use cell phones at all? Are the phones with them when they make sales calls? Are the phones left on during meetings, which may cause disruption of the meeting and lose a big customer? What about usage in the automobile?

There may be many more questions as you sink your teeth into this problem, but once you have answered the questions, you’ll be ready to formulate your policy. Here are a few key points that should be in your policy statement:

  • Stipulate that the use of a cell phone, even a hands-free phone, is not allowed when operating a motor vehicle.

  • Inform your employees of the possible health risks of using a cell phone.

  • Address the matter of using cell phones while in a customer’s place of business. It is reasonable to expect the employee to at least put the cell phone on a vibrating mode rather than the normal ring.

  • If you reimburse your employees for cell phone use, require them to certify that they did not use the phone in violation of your policies before they are reimbursed.

  • Require employees to certify in writing that they have read your policy, understand it and will abide by it.

  • Equally as important as the policy is the sanction for violating it. The penalties can be as stiff as losing their job on the first offense, but it may be better to start with a verbal reprimand (documented in the employee file) and work your way up from there. The penalties are important, because you better be prepared to back them up. A policy that is not enforced is not a policy.

The more things change, the more they remain the same. You can bet that if there is a way a cell phone, or any other technological gadget, can harm some one, there will be an attorney ready and willing to help that person sue a wide range of potential plaintiff. This isn’t to say anything bad about anyone; it’s just the state of things. Many lawsuits are justified, but that doesn’t mean you need to make it easy for a plaintiff to beat you in court. If you don’t have a cell phone usage policy, then create one. If you do, review it’s provisions and check them against our suggestions and other examples. One good source is at www.braunconsulting.com and another is www.safetycenter.org. If you need help in creating the policy, simply pick up the telephone and give us a call. We’d be glad to help. Regardless of how you do it, though, get a policy in place so your business won’t "die by phone."

Don’t forget to keep our troops in hostile areas in your thoughts and prayers and, by all means, have a happy Fourth of July and a wonderful month.

These articles are intended to provide general resources for the tax and accounting needs of small businesses and individuals. Service2Client LLC is the author, but is not engaged in rendering specific legal, accounting, financial or professional advice. Service2Client LLC makes no representation that the recommendations of Service2Client LLC will achieve any result. The NSAD has not reviewed any of the Service2Client LLC content. Readers are encouraged to contact their CPA regarding the topics in these articles.

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