ABF Goes to Court Against Teamsters and YRC

Nov. 4, 2010
ABF claims that an agreement between the Teamsters and YRC is in violation of the National Master Freight Agreement

National less-than-truckload (LTL) carrier ABF Freight System Inc. (ABF) has filed legal actions against the International Brotherhood of Teamsters (IBT) and other parties, including several YRC Worldwide subsidiaries, for violation of the National Master Freight Agreement (NMFA), the collective bargaining agreement covering most unionized trucking employees in the country.

ABF filed a grievance under the NMFA and also an accompanying lawsuit, naming as parties the International Brotherhood of Teamsters; the Teamsters National Freight Industry Negotiating Committee; Teamsters Locals 373 (Fort Smith, Ark.) and 878 (Little Rock, Ark.), individually and as representatives of a class of all Teamsters Locals that are parties to the NMFA; YRC Inc.; New Penn Motor Express Inc.; USF Holland Inc.; and Trucking Management Inc.

"It is ABF’s firm belief that the three rounds of concessions granted to YRC—with the latest deal just ratified last week—by the IBT are in violation of the NMFA that has been in effect since April 2008," says Wesley Kemp, president and CEO of ABF. "The NMFA applies equally to every company that signed it and quite simply, with these three amendments, it does not do that. We need a long-term, industry-wide solution that is fair to all NMFA parties. We have the obligation to our employees, to our customers and to Arkansas Best shareholders to enforce our rights under the NMFA and compete on the same playing field with our industry peers."

“After initial review of the ABF lawsuit and grievance, the Teamsters Union finds each of them to be frivolous and without merit,” says Brad Raymond, general counsel for the Teamsters Union. “The Teamsters will vigorously defend against the lawsuit and grievance and will withhold further comment until we have thoroughly reviewed the documents.”

The legal actions, filed administratively under the contract and in federal court in Arkansas, claim that the defendants violated the NMFA in 2009 and 2010 by entering into concessionary side agreements with YRC 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 YRC Companies, and not ABF. The third and latest amendment to the NMFA is expected to "provide further wage, benefit and work rule changes that are expected to generate an average of $350 million in annual savings through the end of the extended agreement," according to YRC Worldwide Inc.’s 8-K report, filed on September 29.

ABF, with more than 8,000 union employees, asserts in its claims that these concessionary agreements were unlawful, unfair and inconsistent with the plain language, intent and purpose of the NMFA, and that they resulted in a substantial competitive disadvantage for ABF.

ABF, believing that the grievance procedure of the NMFA is fundamentally flawed by reason of conflicts of interest on the part of both labor and employer representatives who normally would be impaneled to hear ABF’s grievance, seeks a legal determination to have the court create an appropriate grievance review committee to hear the grievance and resolve the dispute, or to have the contract amendments benefiting only YRC declared null and void by the court, as required by the NMFA. ABF also seeks financial damages in an amount estimated to be approximately $750 million by the time the NMFA is set to expire on March 31, 2013.

ABF Freight System, Inc. is represented by Littler Mendelson. A full copy of the legal pleadings can be found here.

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