Rhode Island Senate votes to nix truck contract clause

June 19, 2018

Keith Goble

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An effort in Rhode Island to put an end to the inclusion of an unfair clause in trucking contracts has taken a big step forward.

The state Senate has voted to advance to the House a bill to prohibit indemnification clauses in trucking contracts. The clauses are set up to protect shippers or hold them harmless from anything that happens with a shipment.

Passage in the chamber marks the first time in four consecutive sessions that the legislation has advanced from either side of the legislature.

This year’s version, much like previous versions, 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.”

Sen. Roger Picard, D-Woonsocket, spoke on the bill prior to the Senate floor vote.

“In the trucking industry large scale shippers attempt to shift liability to small businesses, or shippers, by inserting into the contract language provisions that leave small business owners on the hook for damages,” Picard said. “This bill would correct that.”

The Owner-Operator Independent Drivers Association supports the effort.

Mike Matousek, OOIDA’s manager of government affairs, has said the protection is a reasonable and fair solution to address rules that essentially provide shippers and receivers with immunity from any damage caused by their negligence while a trucker is on their property.

“Truckers should not be held liable for damages or injuries that are caused by the negligence of shippers and receivers,” he said. “Conversely, shippers and receivers should not be held liable for damages or injuries that arise from the negligence of a trucker.”

States lawmakers across the country have been active in recent years changing rules on indemnity clauses. To date, 45 states have acted to forbid unfair provisions from contracts.

full list of states where protections are in place is available. In addition to Rhode Island, states yet to adopt protections are Delaware, Mississippi, New Hampshire and Vermont.

Affected contracts in Rhode Island would be defined as “a contract, agreement, or understanding” between a motor carrier and a shipper covering the transportation of property by motor carriers, entrance on property to load, unload, or transport property.

The bill, S2592, awaits further consideration in the House Corporations Committee.

To view other legislative activities of interest for Rhode Island, click here.