ABF waits on appeals court ruling in YRC case

Officials with Fort Smith-based ABF Freight System and those in the trucking industry closely watching a $750 million action by ABF against the Teamsters and trucking giant YRC must now wait until at least July for an appeals court decision.

On Tuesday (April 12), attorneys for ABF presented their case in the United States Court of Appeal for the Eighth Circuit (St. Louis) as to why the court should overturn a lower court ruling.

On Nov. 1, Arkansas Best Corp. — the parent company of ABF — filed a lawsuit seeking the $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 are asking the appellate court to overturn the lower court’s dismissal of our case in December because we believe that ruling constituted clear legal error,” noted Tuesday’s statement from ABF.

The statement also noted that a judge on the three-member panel “indicated that the court would try to meet a July deadline cited by the defendants as the time-frame needed for a decision.”

A favorable decision for ABF would create more troubles for a financially troubled YRC.

Overland Park, Kan.-based YRC noted in a federal filing of Mar. 14 that it may be at the end of its financial rope. YRC is the largest less-than-truckload carrier in the nation, and ABF is considered the second largest LTL.

YRC narrowly avoided bankruptcy in January 2010 through a complex bond swap agreement with creditors. The less-than-truckload company had piled up a mountain of debt with the $1.07 billion acquisition of Roadway Corp. in 2003 and the $1.23 billion acquisition of USF Corp. in 2005.