New York bill would bar unfair truck contract rule

By Keith Goble, Land Line state legislative editor | 5/13/2015

A New York state lawmaker has introduced a bill 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.

Sponsored by Assemblywoman Donna Lupardo, D-Endwell, the bill 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.”

Lupardo said because indemnification language is commonly included in contracts, motor carriers have no choice but to accept the terms.

“This legislation will not limit anyone’s ability to collect for damaged goods, but will simply hold the responsible party liable,” Lupardo wrote in a memo on the bill.

The Owner-Operator Independent Drivers Association supports the legislation.

Mike Matousek, OOIDA’s director of state legislative affairs, has called the legislative push in New York and other states 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, 42 states have acted to forbid unfair provisions from contracts. Arkansas acted this spring 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 York, states yet to adopt protections are Delaware, Mississippi, New Hampshire, New Jersey, Ohio, Rhode Island and Vermont.

Affected contracts in New York would be defined as “a contract, agreement, or understanding” between a motor carrier and a shipper covering the transportation of property for compensation or hire by the motor carrier, entry on property to load, unload, or transport property.

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

The bill, A7307, awaits consideration in the Assembly Transportation Committee. A nearly identical bill, S4173, is in the Senate Transportation Committee.

To view other legislative activities of interest for New York, click here.

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