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.[PAGEBREAK]

6. Not Having a Comprehensive Driver Conduct Policy

In many ways, defending against negligent entrustment is about process. When an employee driver is involved in an accident and a plaintiff’s attorney comes knocking, you need to be able to produce documentation of any inappropriate actions that were due to the driver, and proof that you did whatever you could to obviate such a situation.

For example, a company should be able to point to company policies that regulated driver conduct while operating a company vehicle and be able to show it took safety seriously, prohibited unsafe driving habits, and communicated those policies clearly.

Key elements of such a policy should include details about: driver conduct; driver vehicle operation (e.g., “No Speeding”); drug and alcohol use; cell phone use and other distracted driving; business, personal, and family use of vehicles; and more.

7. Not Disseminating Strong Cell-Phone Use Policies

In early 2012, a Corpus Christi, Texas, jury handed down a $21-million award against Coca-Cola after one of its drivers caused an accident while on a business call using her hands-free cell phone. The verdict was reached despite the fact that Coca-Cola’s cell-phone policy, which required the use of a hands-free device when operating a motor vehicle, was completely consistent with Texas law.

The plaintiff’s attorneys in the case made the argument that Coca-Cola knew of the dangers of using a cell phone while driving and claimed that drivers have a cognitive distraction of 37 percent while on a cell phone.

The plaintiff’s counsel claimed Coca-Cola withheld this information from its drivers, in addition to data on the numbers of deaths and injuries arising from cell-phone use while operating vehicles.

While cell-phone usage should be part of a driver conduct policy, it has been the hook that many plaintiffs’ attorneys have used, so it is worth mentioning on its own. It also must be enforced uniformly: Do not have a policy forbidding cell-phone use and then take calls from drivers who are actively on the road.

It is also worth considering, based on the Coca-Cola case, whether your company’s policy should allow hands-free calling or forbid cell phone calls while driving altogether. It is wise to reinforce the policy by educating and reminding drivers of the dangers of cell-phone usage while driving. Of course, these policies and reinforcements must also extend to texting, Web surfing, video watching, and anything else that can distract from driving.

8. Not Enforcing Vehicle Maintenance Policies

There are two reasons why it is essential to keep detailed records of every step of a vehicle’s acquisition and maintenance. The first is, of course, to ensure that it is properly and regularly performed. The second is to be able to offer proof to avoid a negligence claim.

In April 2012, a Domino’s Pizza driver was en route to deliver a pizza; he lost control of his vehicle and collided with another, causing severe injuries and a fatality. The plaintiff’s counsel claimed Domino’s and its franchisor were liable, and the jury awarded a total of more than $32 million, in part due to Domino’s and its franchisor’s failure to “implement and enforce rules regarding the condition and inspection of vehicles being used by delivery drivers.”

To minimize negligent entrustment exposure, all vehicles used in the course of business — whether owned by the company or the individual drivers — must be maintained properly, and this must be documented on an ongoing basis.

9. Not Remembering the Drivers of Normal, Passenger Vehicles

While truck drivers and other fleet operators may be the big fish for plaintiffs’ attorneys, salespersons, territory managers, and others who drive regular passenger cars also provide fodder for negligent entrustment cases. Make sure that anyone who drives on the company’s behalf, whether it is a commercial vehicle or a passenger vehicle, and whether it is owned by the company or not, follows the same comprehensive policies and approach.

10. Not Reacting Quickly After an Accident

Although not negligent entrustment per se, companies should be ready to respond in the event of an accident, in order to be proactive in heading off potential liability.

Once an accident occurs, there is a very limited window for a company to collect accident-related information that can assist in the legal defense. Have an accident response and investigations team on call and responsible for investigating any serious accident at the scene, and have an Incident Review Analysis Procedure in place. Make sure to keep careful records of all corrective actions taken during and after an investigation.

If state law allows it, consider instituting a Personal Cell Phone Records Surrender Policy to be able to understand what a driver may have been doing at the time of an accident.

Bonus Mistake: Not Conducting a Vehicle Safety Analysis

About 96 percent of all new vehicles sold in the U.S. have event data recorders (a.k.a. “black boxes”), and an increasing number of companies are beginning to utilize a vast array of telematics devices and data. This telematics data is often used for tracking vehicle (and product) location, storage temperatures, and more. It also contains a surprising amount of information about how the vehicle is being operated.

Through telematics, fleet managers have insight into the speed vehicles are traveling, whether lights are on, whether seatbelts are in use, and more. Data stored in the devices is increasingly used as evidence in traffic accidents. While the data belongs to the vehicle’s owner, at least 14 states allow lawyers to subpoena it. With data from a black box, plaintiffs’ attorneys have a new and powerful tool to understand exactly what happened in an accident. And, plaintiffs’ attorneys are also beginning to aggressively target other telematics data companies might have.

There is potential for a giant impact in terms of negligent entrustment. For example, a study of telematics data could show that a driver is a habitual speeder. If the plaintiff convinces a jury that a company should have known that (since they certainly could have known by pulling data) and took no action to correct the behavior, the company is positioned to lose a negligent entrustment claim.

Other next-generation safety devices may have a similar impact. Soon, plaintiffs will try to build cases based upon what the company could or should have done in advance to prevent an accident, had it invested in a new safety device. Dangerous roads are ahead.

Negligent entrustment, and other associated vehicle safety lawsuits, are increasingly becoming a common concern and worry for fleet managers. In addition, these lawsuits should be a concern for any company that has drivers. By understanding the risk associated with drivers and some common-sense steps to take, companies can dramatically limit their exposure to negligent entrustment lawsuits and place themselves in the best position to defend such a lawsuit should an accident occur. n


About the Author

Richard Alaniz is senior partner at Alaniz Schraeder Linker Farris Mayes, L.L.P., a national labor and employment firm based in Houston. He can be reached at (281) 833-2200 or ralaniz@alaniz-

John Cruickshank is an attorney at law for Alaniz Schraeder Linker Farris Mayes, L.L.P., and can be reached at