Colorado closes in on truck contract rule change

By Keith Goble, Land Line state legislative editor | 3/7/2014

An effort at the Colorado statehouse to do away with unfair clauses in trucking contracts is headed to the governor’s desk.

Senate lawmakers voted 33-2 on Wednesday, March 5, to approve a bill that would forbid indemnification clauses in trucking contracts. The clauses are set up to protect shippers or hold them harmless from anything that happens with a shipment.

The House previously endorsed the bill on a 41-23 vote.

If signed into law, HB1065 would outlaw provisions in contracts that provide for shippers to be indemnified for losses caused by their own negligence and would invalidate them.

Sen. Mary Hodge, D-Brighton, said the bill would make it easier to assign liability for any damages to a load to the responsible party.

“These lopsided indemnity clauses in contracts eliminate the incentive for shippers and facility operators to meet their responsibilities and duties for safety, as well as their accountability for their own actions,” Hodge testified at a recent Senate Transportation Committee meeting.

Mark Barnes, an attorney for the Colorado Petroleum Association, spoke in opposition to the bill during a recent hearing.

“Our biggest problem is this bill tries to fix a problem that just doesn’t exist,” Barnes testified.

He has also refuted claims that the bill would help small trucking companies.

“If you pass this legislation, property owners will be more selective in whom they do let on their property.”

States lawmakers across the country have been active the past few years changing rules on indemnity clauses. A total of 40 states have acted to forbid unfair provisions from contracts.

A full list of states, and the laws, where protections are in place is available. States yet to adopt protections are Colorado, Delaware, Kentucky, Mississippi, New Hampshire, New Jersey, New York, Ohio, Rhode Island and Vermont.

Owner-operator and OOIDA Life Member Jack McComb of Littleton, Colo., said that truck drivers doing business in states that have yet to take action have little or no choice but to accept the unfair terms. He told Land Line a change forbidding the clauses is “a no-brainer.”

Affected contracts in Colorado would be defined as “a contract, agreement, or understanding, whether written or oral, express or implied,” between a motor carrier and a shipper covering the transportation of property for hire by the motor carrier, entry on property to load, unload, or transport property.

The protection would not apply to intermodal chassis, or other intermodal equipment.

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