ABF suit against YRC Worldwide, Teamsters dismissed

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Updated Dec 20, 2010

Abf Truck1

A U.S. District Court judge on Friday, Dec. 17, ruled that ABF Freight System does not have standing to sue YRC Worldwide Inc. and the International Brotherhood of Teamsters in court. Judge Susan Webber Wright dismissed the case brought by Fort Smith, Ark.-based ABF, which argued that concession agreements between the Teamsters union and three YRC Worldwide entities violate the National Master Freight Agreement.

“We are disappointed in this outcome and continue to believe that our November 1 lawsuit is strong,” ABF said. “We are reviewing the court’s ruling and considering next steps, including possibly an appeal of the decision to the United States Court of Appeals for the Eighth Circuit.”

YRC Inc., New Penn Motor Express Inc. and USF Holland Inc. on Nov. 16 had asked the U.S. District court for the Western District of Arkansas to dismiss ABF’s complaint because ABF was not a party to the NMFA and had no standing to challenge its amendments.

“We have said all along that ABF took itself out of the National Master Freight Agreement and therefore has no right to bring the suit,” says Brad Raymond, Teamsters general counsel. “The bench dismissal should send a strong message to ABF that its attempts to interfere with the contractual arrangement between YRCW and its Teamsters-represented employees must end.”

ABF argued that the union violated the NMFA in 2009 and 2010 by entering into concessionary side agreements with the YRC Worldwide companies to the exclusion of ABF and other companies signatory to the NMFA; these agreements led to ongoing significant wage and benefit reductions and other economic concessions that were applied only to the YRC Worldwide companies.

“From the moment the suit was filed, we were extremely confident it had no merit,” says Mike Smid, president of YRC Inc. and chief operations officer at YRC Worldwide, based in Overland Park, Kan. “We are gratified that after a thorough review of the facts, the judge came to the same conclusion and dismissed this case. The agreement we negotiated in good faith with the union was ratified by our employees who have remained committed to our company, and our customers.”

ABF, with more than 8,000 union employees, argued the third and latest amendment to the NMFA – negotiated between the YRC Worldwide entities and the Teamsters in late September and ratified by union members Oct. 30 as part of a restructuring plan aimed at saving both the company and more than 25,000 union jobs – would provide further wage, benefit and work rule changes that would generate an average of $350 million in annual savings through the end of the extended agreement. ABF also sought financial damages in an amount estimated to be about $750 million by the time the NMFA is set to expire on March 31, 2013.

“ABF needs to realize that it cannot circumvent the negotiating and ratification process through the courts,” says Tyson Johnson, director of the Teamsters National Freight Division. “We negotiated with ABF in good faith earlier this year, reaching an agreement that was overwhelmingly rejected by its employees. ABF should concentrate on freight pickup-and-delivery operations of its company rather than trying to put YRCW out of business through litigation and other means. We are pleased that Judge Wright dismissed this lawsuit because it removes an impediment to YRCW’s restructuring efforts. This decision is the best possible outcome for Teamster members at both companies.”