Is Your Company At Risk Without A Cell Phone Policy?

posted in: Cell Phones | 0

By M L Taylor

No Cell Phone Policy = The Potential For Serious Disaster

“A Cell Phone Policy…Really?”

FACT: Cell phone litigation is one of the newest types of litigation springing up all around the country. Whenever there is an accident or harassment, wage disputes, or other privacy violations, and a cell phone is involved you can bet a law suit may not be far away.

As a Wireless Management Consultant who has written numerous policies in the past, I am always amazed when companies tell me they do not have an active and up to date policy. Some business owners find the average Attorney’s price of $2,500 for a company cell phone policy a little too steep for their budget. Others try to write one themselves, which can be a daunting and overwhelming task. Still others are just unaware of how vulnerable their company is without one.

Why would you want to create a policy for every employee in your company sign? Other than the fact that we live in the most litigious nation on the Earth, you also need to protect your business in other areas as well.

Traffic and Safety Laws

Employers that have employees driving company owned vehicles during the course of business are very much at risk at being held liable if the employee is involved in an accident while using a company mobile phone.

FACT: Employers can incur liability whether or not the call is personal or business related if it is made on a company phone.

FACT: Employer liability in cases involving a third party is based on a legal principle called vicarious liability. It provides that an employer is responsible for the harm caused by its employee if that employee, using a company cell phone, was acting within the course and scope of his or her employment at the time that the accident occurred.

FACT: Plaintiffs often claim that their employer is directly negligent for its own conduct in encouraging or permitting employees to use mobile devices for business without adequate policies and training of those policies.

FACT: It doesn’t matter if the call is being made during regular office 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 found liable for any damages caused by an employee acting within the scope of his or her employment. Employers can now be found negligent if they fail to provide an adequate policy and proper training.

– Recently, in the state of Virginia, a sales rep returning home from work, was talking on her cell phone with a customer. She accidentally struck and killed a teenage girl. The family of the girl filed a $30 million lawsuit against the employer, claiming the company was negligent in providing cell phones to their employees without providing a company cell phone policy or a safety policy. The family won that suit.

-In Arkansas, a jury found a lumber company liable after one of their employees struck another car, gravely 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 had no 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 making a work-related call after hours on his company cell phone. No policy in place.

FACT: Employers can 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 necessary or an encouraged option as part of their job.

IRS Regulations

FACT: IRS guidelines require company issued cell phones and wireless data devices be used only for business purposes; otherwise, personal use of these devices must be claimed as a taxable benefit. Your company could be penalized and audited for non-compliance of this rule. The IRS can declare that all undocumented use of a cell phone in your company is personal and can treat the 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 personal cell phones being used in the workplace. Companies are being audited more often and as a result they are paying serious penalties and fines for non-compliance. You need a policy in place not only to guide company employees regarding the use of cell phones but also to protect your company from these audits. If you have set policies in place that your employees have signed, then you are protecting your business.

-A company was audited by the IRS for cell phone compliance and fined over $19,000 for not have a clear enough policy about employees making personal cell phone calls on their company phones and for making business calls on their personal phones.

Federal and State Labor and Wage 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 law restrict and prohibit an employer from making pay deductions for damaged mobile devices or for failing to return company issued cell phones or for damaging equipment. In most states if you are found at fault for deducting money from an employees paycheck for a lost or damaged phone, and unless your policy is worded correctly, you can be sued for triple damages.

The FLSA

FACT: The Fair Labor Standards Act requires that non-exempt employees must be paid for all hours worked. If, for example, a non-exempt employee checks work email from home or takes calls from a customer on his company mobile phone, the time must 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 concerning privacy rights. You need a policy that is very clear and specific about tracking the whereabouts of your cell phones so that you are not infringing on any one’s privacy.

-A Florida Roofing company was sued by an employee when he discovered his company cell phone was still being tracked after hours without his knowledge. He had visited a friend the night before at a drug rehab center and the next day his employer questioned him about his own drug usage. This was considered an invasion of privacy because the company had no policy in place that informed the employee that his cell phone could be tracked at anytime. The employee was awarded $500,000 in a civil suit.

Other issues

FACT: Employers are now facing increasing claims by employees for health problems allegedly associated with cell phone use. This is happening even though the science appears inconclusive and contradictory. Workers who use cell phones while on the job have now begun to file workers compensation claims and lawsuits based on the theory that radio frequency radiation from cell phones may lead to various forms of brain cancer or other maladies.

Employers should protect themselves with a policy that informs employees of the potential health risks associated with the use of a cell phone, and even suggests or requires using a hands-free device. The policy should state that employees will not hold their employers liable for any suspected health issues that may result from using a company-issued mobile device is critical.

Privacy Concerns

Are you concerned about privacy? Do you have a policy in place 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 companies? Intellectual property, trade secrets, personal customer information, or other confidential data can be captured and used easily with a camera phone.

FACT: Employees may have their picture taken in private areas, and can file suit against your company for invasion of privacy or harassment. Do your employees have cell phones with cameras and video features or Smart Phones with scanners? Do you have a policy in place that covers ownership of images taken with your company-issued mobile devices? Do your employees have broadband or Internet cards? Do you have a policy in place that prohibits your employees from connecting their personal phones to USB ports on their computer?

-An employee of a Delaware company decided it might be fun to play a joke on a fellow employee and take a picture of him relieving himself at a urinal. He snapped the photo on his company cell phone and showed to others back at the office. When that got a few laughs he posted it on the Internet. The company is out of business today after losing a $1.4 million dollar lawsuit for negligence. The employee said there was no written policy in place 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 company is a small price for a document that could possibly save your company from an expensive lawsuit. It’s really 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 in hand when an employee decides he wants to sue you? A signed document that says he has given his permission on the very thing he is trying to sue you for? Sure you would. Without a sound policy in place… you are a sitting duck!

M. L. Taylor is the President and CEO of Wireless Resolutions, a highly successful and much sought after Wireless Expense Management company and Customer Advocate group, that specializes in helping business owners dramatically reduce their cell phone costs. We accomplish this by offering superior, detailed, reliable service and by providing an unmatched level of wireless expertise in the ever-changing and ever-complicated world of telecommunications. Every year, American companies spend in excess of $22 billion for wireless services, most of which is not audited, contested or managed. As a result, studies show that over 80% of these companies fall victim to billing errors, overcharges, excessively high rates, fraud and abuse. Wireless Resolutions began in 2007 with a vision to change the way Business Clients manage their wireless services. After working with all the major providers for over 20 years and witnessing this abuse first hand, I realized the need to bring change to this industry and to fight for the rights of customers who were being taken advantage of.

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