No Cell Phone Policy = Potential for Serious Disaster
“A cell phone policy… Really?”
FACT: Cell phone litigation is one of the newest types of litigation to spring up across the country. Anytime there’s an accident or harassment, wage dispute, or other privacy violations, and a cell phone is involved, you can bet a lawsuit isn’t far off.
As a wireless management consultant who has written numerous policies in the past, I am always surprised when companies tell me they don’t have an active and up-to-date policy. Some business owners find that the average attorney price of $2,500 for a company cell phone policy is too high for their budget. Others try to write one themselves, which can be a daunting and overwhelming task. Others are simply unaware of how vulnerable their business is without one.
Why would you want to create a policy for every employee in your company? Aside from the fact that we live in the most litigious nation in the world, you need to protect your business in other areas as well.
Traffic and Safety Laws
Employers who have employees drive company-owned vehicles during the course of business are at great risk of being held liable if the employee is involved in an accident while using a company mobile phone.
FACT: Employers may incur liability, whether or not the call is personal or business related, if it is placed on a company phone.
FACT: Employer liability in cases involving a third party is based on a legal principle called vicarious liability. It states that an employer is liable for damage caused by his employee if that employee, using a company cell phone, was acting within the course and scope of his employment at the time the accident occurred.
FACT: Plaintiffs often claim that their employer is directly negligent by its own conduct in encouraging or allowing employees to use mobile devices for business without adequate policies and training on those policies.
FACT: It doesn’t matter if the call is made during normal business hours or not; what matters is that the call is somehow work related and the device they are using belongs to YOU! Employers can be held liable for any harm caused by an employee acting within the scope of their employment. Employers can now be considered negligent if they fail to provide adequate policy and proper training.
– Recently, in the state of Virginia, a sales representative who was returning home from work, was talking on her cell phone with a customer. She accidentally hit and killed a teenage girl. The girl’s family filed a $30 million lawsuit against the employer, alleging that the company was negligent in providing cell phones to its employees without providing a company cell phone policy or security policy. The family won that lawsuit.
•In Arkansas, a jury found a lumber company liable after one of its employees struck another car, seriously injuring the passenger. At the time of the accident, the employee driving the vehicle was using the cell phone for a business call. This particular case ended up being settled for $16 million. They did not have a cell phone policy.
-The large investment firm of Salomon Smith Barney paid a $500,000 settlement to the family of a motorcyclist killed by one of its employees who made a work-related call after hours on his company cell phone. There is no set policy.
FACT: Employers may be liable for problems or accidents created by an employee’s use of cell phones while driving if a company provides the phones, or if cell phone use is a required or recommended option as part of their employment. worked.
IRS regulations
FACT: IRS guidelines require that company-issued cell phones and wireless data devices be used for business purposes only; otherwise, personal use of these devices must be claimed as a taxable benefit. Your company could be sanctioned and audited for non-compliance with this rule. The IRS may declare all undocumented use of a cell phone at your business to be personal and may treat monthly cell phone charges as wages, even if the calls were for business purposes.
FACT: The IRS and state auditors have become very aggressive in their requirements regarding the use of personal cell phones in the workplace. Companies are being audited more frequently and as a result are paying serious penalties and fines for non-compliance. You need to implement a policy to not only guide company employees regarding cell phone use, but also to protect your company from these audits. If you have established policies that your employees have signed, then you are protecting your business.
– A company was audited by the IRS for cell phone compliance and fined more than $19,000 for not having a clear enough policy on employees making personal cell phone calls on company phones and for making calls commercials on their personal phones.
Federal and state wage and labor laws
FACT: Deducting the cost of a wireless device from an employee’s final paycheck violates most state and federal wage laws. Federal and state laws restrict and prohibit an employer from making pay deductions for damaged wireless devices or failure to return company-issued cell phones or for damaging equipment. In most states, if you are found at fault for deducting money from an employee’s paycheck for a lost or damaged phone, and unless your policy is written correctly, you can be sued for treble damages.
The FLSA
FACT: The Fair Labor Standards Act requires non-exempt employees to be paid for all hours worked. If, for example, a non-exempt employee checks work email from her home or receives calls from a customer on her company cell phone, the time should be counted as hours worked.
Monitoring and Tracking
Do you have your employee’s consent to track the whereabouts of your company’s mobile devices? Without consent, you walk a fine line when it comes to privacy rights. You need a policy that is very clear and specific about tracking the whereabouts of your cell phones so that you don’t infringe on anyone’s privacy.
-A Florida Roofing company was sued by an employee when he discovered that his company cell phone was still being tracked after hours without his knowledge. He had visited a friend the night before at a drug rehabilitation center and the next day his employer questioned him about his own drug use. This was considered an invasion of privacy because the company did not have a policy informing the employee that his cell phone could be tracked at any time. The employee was awarded $500,000 in a civil lawsuit.
Other issues
FACT: Employers are now facing increasing claims from employees for health problems allegedly associated with cell phone use. This is happening even though the science seems inconclusive and contradictory. Workers who use cell phones on the job have now begun filing workers’ compensation claims and laws based on the theory that radio frequency radiation from cell phones can cause various forms of brain cancer or other illnesses.
Employers should protect themselves with a policy that informs employees of the potential health risks associated with cell phone use, including suggesting or requiring the use of a hands-free device. The policy should state that employees will not hold their employers liable for any suspected health problems that may result from the use of a company-issued mobile device.
Privacy concerns
Are you worried about privacy? Do you have a policy that addresses the misuse of cell phones in your company? Does it address confidentiality, security, privacy and harassment? Are you concerned about privileged or confidential material, such as trade secrets or information about your customers? Do you have a policy that includes a provision governing camera phones, which present an increasing risk to businesses? Intellectual property, trade secrets, personal customer information, or other sensitive data can be easily captured and used with a camera phone.
FACT: Employees may take photos of themselves in private areas and file a lawsuit against your company for invasion of privacy or harassment. Do your employees have cell phones with cameras and video features or smartphones with scanners? Do you have a policy that covers ownership of images taken with mobile devices provided by your company? Do your employees have broadband or internet cards? Do you have a policy that prohibits your employees from connecting their personal phones to your computer’s USB ports?
-An employee of a company in Delaware decided it would be funny to play a prank on a co-worker and take a picture of him urinating in a urinal. He took the photo with his company cell phone and showed it to others in the office. When that got some laughs, he posted it online. The company is out of business today after losing a $1.4 million lawsuit for negligence. The employee said there was no written policy on cell phone misconduct in the workplace. The judge had no other recourse.
Can you afford to be without a policy?
The answer is no. You can’t afford the risk!
FACT: Having a policy prepared for your business is a small price to pay for a document that could potentially save your business from an expensive lawsuit. It really is a small price to pay for such a powerful defense, should you need it. So why put your company in a vulnerable state by not having one?
Wouldn’t you rather have a signed document on hand when an employee decides to sue you? A signed document that says you’ve given your permission for precisely what you’re trying to sue him for? Sure you would. Without a solid policy in place…you’re an easy target!
