The Car and Truck Fleet and Leasing Management Magazine

Market Trends

It’s Dangerous Not to Know

July 17, 2007, by Mike Antich

Industrywide, one out of three fleets does not order post-employment motor vehicle record (MVR) checks on employee drivers. When asked why, many fleet managers will tell you privately the reason for not doing so is that they would rather not know. The logic is by not knowing they distance themselves from potential negligent entrustment and negligent retention lawsuits. For instance, one 1,000-plus vehicle fleet performs an MVR only at the date of hire to ensure the employee is a licensed driver. No subsequent MVRs are ordered. The fleet manager argues that the state DMV in which the employee lives only grants a driver’s license to someone qualified to drive a motor vehicle. Why does a corporation have to adopt a stricter approach than a state DMV? I reply that one reason is to avoid a negligent entrustment lawsuit. The fleet manager points out that in the company’s 100 years of existence, it has never been sued for negligent entrustment.

Why No Industry Consensus on MVRs?
What is the industry’s responsibility in ensuring unsafe drivers are not driving company vehicles? There is no standardized practice within the fleet industry. Policies range from collecting no MVRs to creating elaborate MVR-compiled point systems. Currently, the DOT mandates requirements for commercial vehicle drivers. Are similar mandates needed for light-duty fleets?

My position is that a fleet manager must know what is on MVRs for all drivers of company-provided vehicles. If you do not know, you are just waiting for trouble to happen. But more importantly, it is the “right thing” to do, especially if your actions prevent a fatality or debilitating injury. By not conducting MVRs, it looks as if you are not in control of your fleet and that your company will let anyone drive regardless of their driving history. It also makes financial sense. There are usually punitive damages, in addition to actual damages, awarded in negligent entrustment cases, which are often huge. In most states, punitive damages are not covered under most corporate liability insurance policies.

I advocate checking driving records at least annually or more often for higher-risk drivers. Clearly define the number of violations an employee can accumulate before losing driving privileges. Failure to take remedial action could expose your organization to liability claims. Negligent retention occurs when a company learns during the course of a driver’s employment that the driver is not competent to drive a vehicle, but still allows him or her to do so. Stipulate in fleet policy that drivers are required to inform you every time there is new activity on their driving record. In the real world, employees will attempt to hide this from their employer. If you don’t use MVRs, you will never find out until it is too late.

Analyzing MVRs from different states can be tricky. Most state DMVs have their own point system for violations. Although the types of violations are generally viewed with equal severity across states, the definitions of violations, and number of points assigned to each vary. However, certain infractions should immediately raise red flags, such as evading a police officer, evading responsibility after an accident, passing a stopped school bus, driving under the influence, or driving 20 mph or more over the posted speed limit. Driving with a suspended license is a major infraction under most systems. However, this may be an innocent oversight if a driver has moved recently.

Monitoring spouses, domestic partners, and dependants who are allowed personal use of a company vehicle is also an increas-ingly common practice. However, some employers continue to resist checking the MVRs of non-employees because of privacy issues and concerns about the confidentiality of the collected data.

When using a third-party to collect MVRs, such as a fleet management company, it is important to realize that the Fair Credit Reporting Act governs this process. Check with your HR department to ensure that driver-related policies and MVR procedures comply with these provisions.

The 80/20 Rule Applies
Driver misbehavior is the greatest contributor to preventable vehicle injuries and fatalities. The MVR can be used as a written indicator of future driving behavior and predictor of future risk. This is especially true for new hires. In many industries, an accident is most likely to occur during the first 18 months of a driver’s tenure with a company. For some fleets, new hires are responsible for 30 to 40 percent of accidents. Overall, 20 percent of company drivers, on average, will be responsible for 80 percent of the accidents. It is important to identify this risk. Given our litigious society, the cost of that liability can run into millions of dollars. This represents potentially huge losses to your company.

On a personal level, the ultimate loss could be your job.

Let me know what you think.

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Author Bio

Mike Antich

Editor and Associate Publisher

Mike has covered fleet management and remarketing for more than 20 years and entered the Fleet Hall of Fame in 2010.

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