ABF seeks appeal in Teamsters, YRC suit

Fort Smith-based ABF filed Friday (Feb. 18) an appeal as part of its effort to sue YRC and the International Brotherhood of Teamsters for violations of a wage agreement.

The appeal was filed in the Eighth U.S. Court of Appeal in St. Louis, and argues that the trucking company “unquestionably” has a right to seek damages from the alleged violations.

On Nov. 1, Arkansas Best Corp. — the parent company of ABF — filed a lawsuit seeking up to $750 million in financial damages from alleged violations of a National Master Freight Agreement (NMFA) by the International Brotherhood of Teamsters and others.

YRC Worldwide, the largest less-than-truckload carrier in the U.S., received three rounds of wage and benefit concessions from the Teamsters, with the most recent announced Nov. 1 that includes up to $350 million annually through 2013. Previously, the Teamsters voted to approve a 15% pay cut among unionized YRC drivers. ABF has been unable to receive similar concessions from the union.

On Dec. 16, U.S. District Court Judge Susan Webber Wright (Eastern District of Arkansas) dismissed the suit for lack of subject matter jurisdiction.

The Teamsters said Wright’s ruling was the “best possible outcome” for the 25,000 union drivers at YRC and the 7,000 at ABF.

“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,” Brad Raymond, Teamsters general counsel, said in a statement “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.”

However, attorneys for ABF argued in a more than 60-page filing that ABF, YRC and the Teamsters were all part of negotiating and signing the same agreement. Also, the attorneys noted that the union drivers for both companies voted for the agreement in the same election.

The filing notes: “Thus, wholly apart from the validity of ABF’s claims against YRC, ABF unquestionably has the right to pursue the Union for its breaches of the NMFA. Moreover, because the Union (by signing the Interim Agreement and acknowledging that ABF is a party to the NMFA) promised to treat both ABF and YRC as “Employers covered” by (and part of the same multi-employer group under) the same NMFA, the Union’s conduct in reducing labor costs for part of the NMFA ‘Employer’ unit through separate side agreements with YRC clearly constitutes a breach of that promise.”

The filing also points out several areas in which ABF believes Judge Wright “committed clear legal error” in dismissing the case.

“ABF’s joint participation with YRC on the same NMFA-created committees is irreconcilable with YRC’s claim that ABF is not party to the same agreement. Yet the district court’s opinion did not so much as refer to this entire category of highly probative evidence,” the filing noted.

David Humphrey, vice president of investor relations and corporate communications at Arkansas Best, said the other parties have until Mar. 7 to respond to the appeal. ABF then has until Mar. 21 to reply to the responses.

Oral arguments before the three-judge panel is expected during the week of April 11-15.

"After that, we will wait for the judicial panel to make a ruling. We don’t know how long that will take but we would hope by late April or sometime in May,” Humphrey noted.