Could New Jersey be next state to prohibit unfair trucking clauses?

By Keith Goble, Land Line state legislative editor | Wednesday, October 08, 2014

A shrinking number of states have yet to act to address unfair clauses in trucking contracts. If two New Jersey state lawmakers get their way, the Garden State will no longer be on the short list of states that have failed to take action.

Sen. Peter Barnes, D-Middlesex, and Assemblywoman Annette Quijano, D-Union, have introduced identical bills in their respective chambers 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.

The bills would outlaw provisions in contracts that provide for shippers to be indemnified for losses caused by their own negligence and make them “void and unenforceable.”

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, is in the Senate Transportation Committee. Quijano’s bill, A3282, is in the Assembly Transportation and Independent Authorities Committee.

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