Few states around the country have yet to act to address unfair clauses in trucking contracts. An effort underway at the New Jersey statehouse would take the Garden State off the short list of states that have failed to take action.
Sen. Peter Barnes, D-Middlesex, and Assemblywoman Annette Quijano, D-Union, are the sponsors of identical bills to do away with indemnification clauses in trucking contracts. The clauses are set up to protect shippers or hold them harmless from anything that happens with a shipment.
If signed into law in New Jersey, provisions in contracts that would be outlawed provide for shippers to be indemnified for losses caused by their own negligence and make them “void and unenforceable.”
The Owner-Operator Independent Drivers Association supports the legislative efforts in the New Jersey Assembly and Senate. The Association recently sent a letter of support to the bill sponsors.
Mike Matousek, OOIDA’s director of state legislative affairs, calls the legislation a reasonable and fair solution to address existing rules that essentially provide shippers and receivers with immunity from any damage caused by their negligence while a trucker is on their property.
“This is simply wrong, and truckers should not be held liable for the negligence of a shipper or receiver,” Matousek said. “Conversely, shippers and receivers should not be held liable for the negligence of a trucker.”
States lawmakers across the country have been active the past few years changing rules on indemnity clauses. To date, 41 states have acted to forbid unfair provisions from contracts. Colorado and Kentucky are the most recent states to prohibit the protection for shippers.
A full list of states, and the laws, where protections are in place is available. In addition to New Jersey, states yet to adopt protections are Arkansas, Delaware, Mississippi, New Hampshire, New York, Ohio, Rhode Island and Vermont.
Advocates for the rule change say that truck drivers doing business in states that have yet to act have little or no choice but to accept the unfair terms. Another complaint is the contract clauses create a safety issue because the shipper’s incentive to perform its duties in a prudent and reasonably safe manner is eliminated.
Affected contracts in New Jersey would be defined as “a contract, agreement, or understanding” 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, including the storage of property.
Barnes’ bill, S1380, awaits consideration in the Senate Transportation Committee. Quijano’s bill, A3282, is in the Assembly Transportation and Independent Authorities Committee.
Copyright © OOIDA