Your new service technician, Joe, jumps into a customer's car to take it for a test drive. Unfortunately, you didn't know about his lead foot and propensity for distracted driving and causing accidents. As Joe is checking his iphone for last night's game scores, he doesn't see the car in front of him stop for the red light. The accident damages three vehicles and severely injures two people. Guess who will be held liable?
That's right - your dealership! It's called negligent entrustment which, in legal terms, refers to the act of an employer leaving, or requiring use of, a dangerous item (firearms, vehicles, etc.) with or by an employee, who the employer knows or should know, is unlikely to use it in a safe manner, potentially exposing others to unnecessary harm. So requiring Joe, who's had 3 speeding tickets, a DUI and 2 major accidents in the past 5 years, to test drive the customer's car is an act of negligence for which the dealership can be sued.
Adding punitive damages (usually up to treble damages) is common in these types of cases. This can be debilitating to an employer as punitive damages are NOT insurable, leaving you with the entire bill. And, of course, that's not all. Your reputation and goodwill may take a serious hit as well. Picture the news reports with video of your dealership.
Best Course of Action
Having a written driver qualification / safety policy and enforcing such a policy are the best ways of avoiding a negligent entrustment lawsuit. In your dealership, driver history checks should not just be something HR does randomly, but a set procedure that is instituted for all job applicants and employees who will potentially drive the dealership's vehicles or your customers' vehicles or even their own vehicles on company business. Driving records should be reviewed periodically for employees with driving responsibilities.
Driver testing and training should also be an established procedure. A qualified driver should take a test drive with the employee/ applicant to determine if there are any deficiencies in driving skills and to evaluate defensive-driving techniques. Any deficiencies can be addressed with training.
Driver records are subject to the Fair Credit Reporting Act (FCRA) and state laws regarding consumer reports. In Massachusetts, an employer must provide the employee or job applicant with a clear and conspicuous written disclosure informing them that a consumer report may be obtained for employment purposes. FCRA states that the employer must get an applicant's written consent ahead of time if requesting a consumer report such as the applicant's driver history. Driver records also contain personal information and should be handled accordingly.
Establishing a meaningful and realistic driver qualification program is vitally important to the safe operation of your dealership's vehicles and those in your care, It is also vital to the financial welfare of your dealership.