Managing the Financial Side of Commercial Fleets

Top Negligent Entrustment Mistakes Employers Make

A negligent entrustment lawsuit can cost a company millions of dollars and can be easily prevented by avoiding a few simple, but possibly fatal, mistakes.

March 2014, by Richard Alaniz & John Cruickshank

Vehicle accident lawsuits remain one of the most expensive types of liability for companies that use vehicles in their business. That risk has increased in recent years due to two developments. The first is the increase of distracted driving, which refers to the growing use of electronic devices and digital information and the effect they have on diverting a driver’s attention from road conditions. The second is the emergence of a legal theory called negligent entrustment.

Negligent entrustment is a legal concept that holds employers liable for their own negligence in choosing an employee to drive a vehicle. Simply put, a company can be liable for any accidents or other problems if it can be shown that the company was negligent in its entrustment of the vehicle to that driver or the selection of that vehicle.

Understanding Liability Issues

It is crucial to understand that the standard is not whether the employer knows it has put people at risk; it is whether the employer should have known. Most states impose liability when an employer knew or should have known that an employee was unfit to drive a vehicle, or that a vehicle was unsafe. This means that companies must be able to show that they did everything they reasonably could to prevent accidents; otherwise actions you did or didn’t take might be construed as negligent entrustment.

Here are 10 mistakes employers often make, opening themselves up to negligent entrustment claims:

1. Not Creating Comprehensive Job Descriptions

It’s important to have a comprehensive job description laying out the requirements of the job for your drivers. Not only do they help ensure you get the right employee in the job (for example, by making sure the driver is certified to operate a particular piece of equipment), but they can also be used as clear grounds when you deny an applicant or employee a job.

Remember, the standard is “should have known.” Comprehensive job descriptions are commonplace and considered a best practice in almost all industries. It is easy to envision a plaintiff’s counsel claiming that you should have had a comprehensive job description, and that, if you had one, you would have been able to see a gap between a company’s requirements and its driver’s experience and certifications.

Comprehensive job descriptions are also particularly important for defending Americans with Disabilities Act (ADA) claims. Make sure all job descriptions are ADA-compliant. Such a job description can help identify whether an applicant will be able to perform the essential tasks required, and whether it is possible to make a reasonable accommodation. Also, if a charge of discrimination is brought under the ADA, you can more easily defend it if you can readily establish that the disabled individual could not perform the position’s essential functions, even with reasonable accommodation.

2. Not Pulling MVRs on Drivers

Again, in the spirit of “should have known,” pulling motor vehicle reports (MVRs) is a must. MVRs make it easy to know if a driver has a poor driving record. If the record is not reviewed and that driver causes an accident, a negligent entrustment case is going to be close to impossible to win.

It is also wise to conduct MVRs on existing drivers at least once a year to see if their records have changed. Drivers may be involved in accidents, or they may get ticketed off the clock. It is important to stay up-to-date on this information.

In addition, beware of “expunged” MVR records. Many states have a process where drivers can remove part of their driving record from view, hiding previous violations from potential employers. Most states, however, do not prohibit you from asking applicants about expunged records. The driver should list the violations, and you can decide whether or not to employ. And, if the driver is dishonest, you are in a better position to defend a negligent entrustment claim.

3. Not Conducting Background Checks Beyond MVRs

There is a lot of other information out there relevant to whether a potential driver is qualified, and completing a more comprehensive background check can be vitally important to avoiding a negligent entrustment lawsuit. The more you look into a driver’s background, the easier it will be to build a case that there was nothing you should have known. Take care to comply with the Fair Credit Reporting Act and any state laws.

4. Not Running a Post-Offer Drug Screen

Make sure the job offer is contingent on passing a drug test. Most employers are doing this, but there are still some who are not. If your driver gets in an accident and is found to have been using illegal drugs at the time, it is important to be able to demonstrate that you tested that driver, before they began driving for you. It is also very important to remember to comply with the Americans with Disabilities Act (ADA) — make sure your company runs the drug screen post-offer.

5. Not Providing Driver Training

Many employers, especially small operations, don’t see the need to ensure drivers receive training on the specific vehicles they operate. This is a mistake. All drivers should receive training upon being hired and that should be updated at least annually. Training is important to demonstrate that a company took care to ensure its drivers were qualified and remain up-to-date on new policies, rules, technologies, etc.

The extent and depth of the training can vary depending on the operation, but the training program should be updated frequently to make sure that your training is always up-to-date.

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