The Grawe Gazette – General Counsel
By The Grawe Group, May 2023
It has been far too long since we shared some updates for our readers. The Grawe Gazette has been on the sidelines through the winter with client projects, but with a few state legislatures wrapping up for the year this spring after very active sessions, we are back with a few updates.
State Legislatures Making Noise
Iowa Passes Sensible Tort Reform
Let’s start with arguably the biggest positive on the legislative front in the country. This spring Iowa joined Florida, Texas, Louisiana, and others in passing positive tort reform legislation in recent years. Iowa passed a $5 million cap on non-economic damages (e.g., pain and suffering) in motor vehicle accident lawsuits, and perhaps even more impactful, Iowa cut off plaintiff’s ability to make the lawsuit about negligent hiring instead of who was actually at fault in the accident. You can check out the bill here.
Exceptions do apply
The cap does not apply to economic damages like lost wages, medical bills, property damage, etc. The law also has exceptions to the cap, meaning you could lose out on the benefits of the $5 million cap on non-economic damages if you fail to comply with certain safety and compliance regulations. You will not get the benefit of the $5 million cap if:
- Your driver has an expired CDL
- Your vehicle is a bus or other passenger vehicle
- Your vehicle does not require a CDL
- Your driver is under the influence of drugs or alcohol (or refuses to submit to a test)
- Your driver is more than 15 mph over the speed limit
- Your driver was driving recklessly
- Your driver is using an electronic device or violates any law related to electronic devices
- Your driver is disqualified from driving at the time of the accident
- Your driver commits a felony using the vehicle
This is a major win for sensibleness in tort reform. Injured plaintiffs still get fully compensated for all their economic losses, they can still get up to $5 million for pain and suffering from a tragic accident, and the caps can still be thrown out when carriers and drivers are truly bad actors. But for the vast majority of carriers and drivers out there, the ones trying to deliver freight safely, legally, and on-time every day, this new law is a welcome pushback against the runaway plaintiff’s bar.
Minnesota Lawmakers Pass a Bunch
Staying in the Midwest, Minnesota’s legislature passed a litany of new bills this session. Paid family leave was passed and will be coming in 2026, an increase in the gas tax is on its way, and any new non-competes entered into beginning this summer will not be enforceable. The non-compete ban in Minnesota will not apply though to:
- Any non-competes signed prior to July 1, 2023
- Non-solicitation of customers and employees
- Confidentiality and intellectual property protection agreements
- Non-competes tied to the sale or dissolution of a business
Minnesota becomes the 4th state to ban non-competes. A number of courts around the country, local governments and the FTC are also pushing back against non-competes. If you are using non-competes today use this summer to consider adopting non-solicitation and confidentiality agreements to protect your customers, employees, and IP instead. Non-solicitation and confidentiality agreements are often more enforceable, and many employees are pushing back on non-competes making it that much more difficult to recruit top level talent if you insist upon a traditional non-compete.
One last note on legislative activity, Minnesota is adding itself to the list of states legalizing recreational marijuana this summer but remember the federal law on marijuana and the FMCSRs related to marijuana have not changed for your cmv operators.
New Podcast Episodes
Check out the website or your favorite podcast repository for the latest episodes of the Grawe Pod. We have a few new episodes, including a discussion on driver qualification guidelines.
The Grawe Group, LLC is here to bring peace of mind to you and your business. We are a professional services firm focused on the transportation industry. With a team of experienced executives, we provide general counsel, executive leadership, and special project services for trucking and logistics companies. From legal and risk management matters, to operational, financial, and leadership challenges, the Grawe Group has the practical expertise in trucking and logistics to help you build sustainable success. www.thegrawegroup.com.
Check out the Grawe Pod, transportation’s general counsel podcast, for discussions on challenges industry leaders face in their business and how to address them. Now available on iTunes, Spotify, and other major podcast outlets!