ABF takes Teamsters and YRC to court

For YRC, the new labour contract with the Teamsters, which extends the previous agreement (due to expire in 2013) until end-March 2015, is an important step in the company’s recovery plan. It addresses YRC’s competitiveness, its re-entry into multi-employer pension funds and its progress toward long-term growth.

But ABF says the contract violates the National Master Freight Agreement (NMFA)  –  the collective bargaining agreement covering most unionised trucking employees in the US.

Yesterday ABF today 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, AR) and 878 (Little Rock, AR), individually and as representatives of a class of all Teamsters Locals that are parties to the NMFA; as well as YRC Inc, New Penn Motor Express Inc, USF Holland Inc and Trucking Management Inc.

ABF seeks immediate resolution, and approximately US$750 million in financial damages.

ABF Freight System’s president & CEO Wesley Kemp, said that ABF believes that the three rounds of concessions granted to YRC by the IBT are in violation of the NMFA that has been in effect since April 2008.

"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."

According to the legal actions that were filed administratively under the contract and in federal court in Arkansas, 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 29th.

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 labour and employer representatives who normally would be impanelled 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.