Judge dismisses ABF lawsuit challenging Teamsters’ concessions to YRC Worldwide
Kansas City Business Journal - by David Twiddy , Staff Writer
A federal judge in Arkansas will dismiss an ABF Freight System Inc. lawsuit that sought to overturn a series of worker concessions negotiated between YRC Worldwide Inc. and the International Brotherhood of Teamsters union.
Following a Thursday hearing, U.S. District Judge Susan Webber Wright granted motions by Overland Park-based YRC (Nasdaq: YRCW) and the Teamsters to dismiss the suit due to lack of standing. An order was expected to be entered later.
“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,” ABF’s statement said.
Meanwhile, YRC officials said they were “gratified” with the decision, which eases their efforts to negotiate new financing terms with lenders.
“From the moment the suit was filed we were extremely confident it had no merit,” according to a released statement from Mike Smid, president of subsidiary YRC Inc. and chief operations officer for YRC Worldwide.
The company’s investors also were happy, pushing YRC’s stock up 49 cents — nearly 15 percent — to $3.83 in Friday trading.
ABF, based in Fort Smith, Ark., claimed that the three rounds of concessions negotiated between certain YRC subsidiaries and the union, and approved by Teamsters members, violated the National Master Freight Agreement, a contract covering truckers and dockworkers across the country.
YRC and the Teamsters argued that ABF removed itself from the national contract in 2008 to negotiate its own contract and couldn’t file suit.
“We negotiated with ABF in good faith earlier this year, reaching an agreement that was overwhelmingly rejected by its employees,” said Tyson Johnson, director of the Teamsters National Freight Division. “ABF should concentrate on freight pick-up and delivery operations of its company rather than trying to put YRCW out of business through litigation and other means.”
The lawsuit had been a potential stumbling block to YRC’s efforts to restructure the company. YRC, facing mounting operational costs and slowing freight volume, last year persuaded Teamster members in two votes to approve 15 percent pay cuts and to waive the company’s obligation to contribute to employee pensions for 18 months.
In late October, the union said a majority of its 25,000 YRC workers approved a third round of concessions, extending the pay cuts from 2013 to 2015, extending the pension contribution waiver from January to June and lowering the amount of those pension contributions to 25 percent of what the company paid last year. The concessions are estimated to save the company $350 million a year.
ABF, with more than 8,000 Teamsters-represented employees, was unsuccessful at getting concessions adopted in the spring. The company was asking for a 15 percent pay cut.