Montana, Idaho prohibit unfair trucking clauses

By Keith Goble, Land Line state legislative editor | 3/22/2013

The push continues in statehouses across the country to prohibit unfair clauses in trucking contracts.

Montana lawmakers sent a bill to the governor 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.

Owner-operator and OOIDA Board Member Miles Verhoef of Saco, MT, said he welcomes the change because the indemnity clauses can really put carriers at great risk financially.

“All these shippers and receivers that expect drivers to hold them absolutely blameless, it’s crazy,” Verhoef told Land Line.

During Senate floor discussion, Sen. Anders Blewett, D-Great Falls, said that the bill protects “the small guy who’s entering into a contract from having to indemnify the other party for what the other party does. It’s obviously not a very good circumstance to be in because you can’t control what the other party is doing.”

HB347 is headed to Gov. Steve Bullock’s desk. Senate lawmakers approved the bill on a 44-1 vote. House lawmakers already endorsed it by unanimous consent.

In neighboring Idaho, Gov. Butch Otter signed into law a similar effort. The protections in H168 take effect July 1.

Additional efforts in Arkansas, Nevada and New York would add them to the list of states to act in the past few years to change rules on indemnity clauses.

In the past year Alabama, Hawaii, Massachusetts, Minnesota and South Dakota acted to forbid the provisions in motor carrier contracts. Starting Thursday, March 28, Michigan will become the 36th state to adopt the protection from the unfair clauses.

A full list of states, and the laws, where protections are in place is available.

Advocates for the 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.

“This legislation will not limit anyone’s ability to collect for damaged goods but will simply hold the responsible party liable,” Sen. George Maziarz, R-Newfane, wrote in a memo attached to his New York bill.

Affected contracts typically are 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.

The protections sought exclude intermodal chassis, containers or other intermodal equipment.

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