Unsafe Fleet Driver Risks: Understand your Liability

An ostrich with its head in the sand is just as blind to opportunity as to disaster.”
(author unknown)

Are you an owl or an ostrich?

Donlen-Ostrich-Fleet-Accident-Liability-mdDo you know if your employees are really safe drivers? Obviously accidents have a cost to your business in employee downtime and replacing damaged vehicles. But did you know that putting a bad driver behind the wheel could expose your company to increased liability for a serious collision that is linked to your failure to adequately monitor, train, or supervise the driver?

Not knowing what your drivers are doing behind the wheel – being an “ostrich” – puts your business at added risk.

In the first of a special two-part series beginning today, Donlen’s General Counsel, Carla Garfinkle, provides important insight into the liability issue, and your responsibility as an employer.1

Part One: An Ostrich is Blind to Disaster

Your employee speeds while driving a company vehicle or on company business. Or worse, drives drunk. CRASH! An accident happens. It turns out the employee has a history of speeding or DUI’s. Does the company have more exposure if it knew or did not know that it had employed a high-risk driver? Ignorance may equal negligence, so not knowing is not a viable option.

There is overwhelming evidence that not knowing bad driving patterns of fleet drivers can actually expose the company to much greater liability.

According to the May 2012 issue of The Recorder-Verdict Search, one of the largest California settlements in 2011 arose under a negligent entrustment case against Xerox. A woman leaving evening church services with her family was struck by a company van being driven by a 20-year veteran Xerox employee who was driving while intoxicated. The plaintiffs alleged that Xerox was negligent because it did not monitor the driving behavior of its employee and if it had checked, it would have discovered prior DUI convictions and license suspensions.

Negligent entrustment is different than indirect or vicarious liability that employers face for the negligent actions taken by employees in the course and scope of their employment. Under theories such as negligent entrustment or negligent hiring, training, supervision and/or retention, the employer is directly liable for its own negligence because the employer did not exercise reasonable care in its role as employer. The standard differs from state to state, but in many states, the standard for finding an employer liable is not if the company knew but if the company should have known that its employee or contractor was a potentially unsafe driver. With these types of direct tort claims, employers face the added risk of punitive damages that are often not covered by insurance.

Sample cases:

“Compliance with industry and statutory standards is evidence of the use of reasonable care, but it is not dispositive of that issue.”

This is the holding of the Texas Court of Appeals in the case of Morris v. JTM Materials Inc. Morris was injured when his car was struck by a JTM vehicle being operated by an intoxicated JTM employee on a Saturday night. The court held that JTM was not entitled to summary judgment in the negligent supervision/negligent entrustment action, even though JTM had not authorized the after-hours use of the vehicle, the JTM employee had passed a drug screening test, and the background check performed by JTM on the employee had not uncovered that the employee had lied on his employment application and actually had prior convictions for driving while intoxicated. The court concluded that reasonable care may require even more. Since JTM was unable to prevail in the summary judgment motion, JTM was forced to either pay a settlement or incur the time and expense of litigation.

“The evidence shows that the employer knew or should have known of its employees’ sleeping habits because of their phone calls and by examining their gas and motel slips.”

This was part of the justification used by the Supreme Court of Iowa in the case of Briner v. Hyslop to hold that a corporate employer could be liable for punitive damages in connection with a fatal accident caused by one of its employees. In this case, a McLane employee fell asleep while driving a truck on company business and killed the driver of another vehicle in a head-on collision. The court held that since punitive damages are designed to “punish” or deter wrongdoing, McLane would only be liable for direct damages caused by its non-managerial employee unless there was some independent fault on the part of McLane. The court acknowledged that McLane was not negligent in hiring or retaining the employee and had not approved the actions of the employee. The court nonetheless found that McLane could, in fact, be liable for punitive damages because McLane did not adequately supervise its employees to ensure that they do not drive excessive hours.

So what can you do?

According to a recent study by the National Highway Traffic Safety Administration, in 1998-2000, motor vehicle collisions were estimated to cost employers nearly US $60 billion annually. The NHTSA study concludes: “Protecting employees from motor vehicle crash injury can be a profitable investment of time and resources… Developing a proactive traffic safety program is one of the best ways to control costs from workplace vehicle crashes.” These costs are on top of added fuel costs and other fleet costs that could be reduced or eliminated by proactively monitoring driver behavior.

An ostrich is also blind to opportunity. In Part Two, we’ll examine ways to help you become an owl. You’ll find out ways to help limit your liability and get a better handle on your driver’s performance. In the past, companies were only able to research driver history. With today’s technology, you have real-time insight into driver behavior that could help to avoid costly exposure for your business.

FleetWeb® Tips

Quickly check the MPG performance of your fleet in the Fuel Reporting Suite from the Do Menu in FleetWeb.

  • Click the “Do” icon at the bottom of the screen.
  • Under the My Fleet Performance tab, click “Fuel Reporting Suite.”
  • Select the box next to “% of units with actual MPG < City/Hwy MPG (90 day).”
  • Click “Submit.”
  • Once, the “Success!” message appears, close the Preferences window.
  • Click the “Do” icon, then click “Fuel Reporting Suite” to view your updated report.


Hertz Value Lease™ Deal of the Week


donlen-hertz-value-lease-toyota-rav4-base-05132012 Toyota RAV4 BASE*

  • Estimated Mileage: 21,370
  • Exterior Color: Silver
  • Hertz Value Lease Base Price: $19,517

*Vehicle was available at the time of posting to FridayFleet. The exact vehicle may not be available after this date. Photo of vehicle is for illustrative purposes only. Contact your Donlen Account Manager to learn more about Hertz Value Lease vehicles that may be right for your application.

Driver’s Corner

Are you setting a good example? According to new research, texting while driving has now replaced drunk driving as the number one cause of teenage deaths on the road in the U.S. – and the numbers are staggering. More than 300,000 teens are injured and more than 3,000 die each year as a result of texting while driving. If you have children – or if you’re ever the driver when children or teens are present – set a great example. (It goes without saying that this should be your practice ANY time you’re behind the wheel). Turn off your phone. Put it in the glove compartment. Make it known that texting while driving is not acceptable.

And finally…

And finally, words can’t express how much we love this! A Toronto-based photographer has disassembled everything from a piano to bicycle – and lots of stuff in between – rearranged the parts and then photographed them. The painstaking detail of these teardowns is nothing short of spectacular, and the number of parts it takes to build everyday items is unreal. You must check them out > http://gizmodo.com/some-disassembly-required-exquisite-teardowns-of-every-487106890 His dream? To disassemble a car. We’re waiting with bated breath…

1This article is for educational purposes only. It is not intended as legal advice or a legal opinion. Tort laws vary by state and cases often are decided differently under similar fact patterns even within the same state. Donlen expressly disclaims any liability for the correctness or completeness of the material presented in this article and recommends verification by your own legal advisors.

Have a nice weekend. Safe travels.

Originally appeared in FridayFleet on May 17, 2013

About Donlen
Donlen is the industry’s leading provider of integrated financing and management solutions for corporate fleets. Utilizing a highly consultative and strategic approach, Donlen helps fleets reduce cost, improve utilization, and increase driver productivity. Donlen’s innovation has been honored with the Computerworld “2012 Honors Laureate for Economic Development” and the “2012 InformationWeek 500 List of Top Technology Innovators Across America.” Their workplace excellence has been recognized on the IAOP “The Global Outsourcing 100®” list for seven of the last eight years, and as one of the “101 Best and Brightest Places to Work For in Chicago” each year from 2007-2012. Founded in 1965 and headquartered in Northbrook, IL, Donlen is a wholly owned subsidiary of The Hertz Corporation (NYSE: HTZ). For more information about Donlen, visit www.donlen.com.