A couple of years ago in Florida, a salesman for a lumber wholesaler was talking on his cell phone while driving to an appointment and crashed into a car driven by an elderly woman. His employer was sued for $21 million, and the case was later settled for $16.2 million. An isolated case? Hardly.

More and more employers are being sued because their employees have become involved in car accidents while talking on cell phones. Yet, few employers have adopted a cell phone policy despite the severity of the problem

In fact, a 2002 study by the Harvard Center for Risk Analysis estimated that the use of cell phones by drivers results in approximately 2,600 deaths, 330,000 injuries, and 1.5 million instances of property damage in the United States each year.

A study reported in the New England Journal of Medicine in 1997, which was one of the earliest but still one of the most comprehensive studies on cell phone usage while driving, found that the risk of vehicle accidents is four times greater when motorists are using cell phones.

Part of the problem is reduced physical control (trying to steer with one hand). The more significant problem, though, is mental inattentiveness. Many employers have attempted to reduce the risk of accidents by arranging for employees to use hands-free devices. However, these devices are even more of a problem, because they encourage people to talk longer and more frequently on cell phones while driving.

A 2003 University of Utah study found that drivers on hands-free cell phones are less attentive than drunk drivers. Subjects used a driving simulator in the study. Those talking on cell phones had slower reaction times and more accidents than the other subjects who had drunk vodka and orange juice until their blood alcohol level reached .08 percent, the legal limit in most states for driving while under the influence of alcohol.

What's more, cell phone conversations are more distracting than conversations with a passenger in your car. That's because the passenger can actually be a driving aid, helping you keep your eyes on the road, pointing out potential hazards ahead. In addition, if driving does become hazardous, the passenger tends to stop talking and begins to help you navigate. The person on the other end of the cell phone, on the other hand, has no idea what's going on while you're trying to drive, and thus continues to talk, regardless of how dangerous your driving situation has become.

Because of the increasing frequency of accidents involving cell phone usage, a number of states have adopted statutes related to cell phone usage by drivers.

'Some states, for example, have passed laws that prohibit municipal employees from driving while talking on cell phones,' notes Adam J. Cohen, an associate with the law firm of Pullman & Comley, LLC in Bridgeport, Conn.

Over the last three years, every state in the nation has at least considered some-sort of legislation related to cell phone use while driving. Seventeen states have laws or restrictions on the books, the toughest being in New York, New Jersey and Washington, D.C., which prohibit the use of hand-held phones while driving, but allow hands-free devices.

As noted earlier, though, these laws can cause more problems than they solve, and other agencies are attempting to provide more education to states in this regard. For example, the Governors Highway Safety Assn. in Washington, D.C., discourages states from adopting legislation that bans drivers from using hand-held cell phones while driving.

'Our position is that drivers should not use cell phones, either hand-held or hands-free, while driving,' says Jonathan Adkins, a spokesperson for the GHSA. 'Driving and talking on cell phones at the same time creates dangerous situations, and lives are lost in crashes where cell phone use has been a contributing factor.'

In 2004, the National Highway Traffic Safety Administration began recommending that people not use cell phones at all while driving.

So where does this leave employers? In simple terms, employers should have cell phone policies in place. This trend is already occurring among forward-thinking employers, according to Cohen.

'State laws are not developing nearly as quickly as employer policies,' he notes. 'In addition, employer policies tend to be much stricter than state laws.'

The GHSA is one organization that is encouraging employers to create policies on cell phone usage.

'We encourage employers to have policies in place that ban employees from using electronic communication equipment such as PDAs, laptop computers and cell phones on the job,' explains Adkins.

There are two reasons employers should adopt policies, according to Cohen. (Cohen specializes in working with municipalities to improve revenue collection. He also does employment work for these municipalities.)

'In the course of doing this, I started to notice a number of large jury verdicts around the country against employers when their employees were involved in vehicle accidents that involved cell phone usage,' he notes. 'I then began encouraging clients to consider policies to help protect them from liability in this area.'

Cohen admits that other distractions, such as eating, can cause accidents. So why focus policies on cell phones in particular? Both of his reasons relate to legal liability exposure—where employers are sued for accidents caused by their driving employees.

'First, it is difficult to prove that someone was eating a hamburger when an accident occurred,' he explains.

However, because cell phone providers keep track of usage, it is easy to prove whether an employee was talking on a cell phone at the moment an accident occurred. In fact, plaintiff attorneys now routinely subpoena cell phone records to determine whether drivers were talking on their phones at the time vehicle accidents occur. In many cases, the records verify that drivers were on their phones immediately prior to calling 911 to report the accidents.

Second, cell phone use is novel.

'People have been eating in their cars for decades,' continues Cohen. 'However, cell phone—related accidents are a ;hot' topic these days. As such, they tend to attract a lot of plaintiff's attorneys.'

If you decide to create a policy on cell phone usage, Cohen has a number of recommendations.

First, the policy should ban all cell phone conversations while driving as a part of work duties. That is, it should include bans on personal cell phones and personal phone calls. 'For example, if an employee is using his own cell phone and talking to his parents while driving for you, you can be held liable,' he states.

Again, since the real problem is distraction, not necessarily driving one-handed, the policy should state that employees cannot communicate on any cell phones (hand-held or hands-free) while driving.

Can employees talk on cell phones at all when in vehicles? Cohen recommends that the policy state that drivers should pull over to the side of the road or a parking lot to make any necessary cell phone calls.

What about incoming calls? That is, what if you need to call an employee while he's on his way to one location to redirect him to another location? Cohen recommends that, if employees do have cell phones, they should be outfitted with caller ID and/or voice mail. In this way, the employee, upon hearing the call, can pull over to the side of the road, stop the vehicle, activate caller ID or voice mail, and return the call if necessary while stopped.

The cell phone policy should be part of the employee manual. In fact, Cohen recommends that employees who regularly drive as a part of their duties read and sign the policy.

Once you create the policy, you need to enforce it. If you don't enforce it, and if an employee is involved in an accident while using a cell phone, your exposure may increase. The reason is that the plaintiff's attorney will emphasize the point that you knew about the risk (as evidenced by the fact that you created a policy), but failed to take appropriate steps to protect against the risk.

Few industrial distributors have cell phone policies in place. Of the 10 or so contacted by Industrial Distribution, only W.W. Grainger had anything to say about the topic.

'The use of cell phones is increasing, and employers are going to have to grapple with this issue,' says Carlos Sintes, workers' compensation claims manager for Grainger. 'Employers need to realize that cell phones are a distraction.'

Grainger has guidelines in place that discourage the use of cell phones while operating vehicles, even in states that don't have laws regulating the use of cell phones.

'It is also the employee's responsibility to comply with existing state and local laws concerning cell phone usage,' adds Sintes.

Research shows that driving is already the most dangerous part of an employee's job. More employee deaths and injuries occur while driving than any other activity. Adding cell phone distraction to the situation is only compounding the problem.

And one other thing to consider: In terms of cell phone-related accident lawsuits, the verdicts that are coming down are often in the millions of dollars.