DC Velocity - March 2011

ABF appeals ruling in labor contract suit

Less-than-truckload (LTL) carrier ABF Freight System Inc. has filed suit in federal appeals court in a bid to overturn a lower court’s ruling that ABF did not have legal standing to sue rival YRC Worldwide Inc. and the Teamsters union for violating a wage agreement. Last November, ABF had brought suit against YRC, the Teamsters, and Trucking Management Inc. (TMI), alleging that they had violated provisions of the National Master Freight Agreement (NMFA), the collective bargaining compact that governs most of the nation’s unionized trucking companies. TMI is a coalition of freight industry employers that currently administers the NMFA.

In late December, District Judge Susan Webber Wright ruled that ABF did not have an enforceable contract with all of the parties and, as a result, the Fort Smith, Ark.-based trucker lacked legal standing to bring a lawsuit. According to published reports, Judge Wright ruled that YRC and ABF were essentially operating under two separate contracts, and that ABF did not have the right to bring legal action against a contract reached between YRC and the Teamsters.

In its appeal, filed Feb. 18 in the U.S. Eighth Circuit Court of Appeals in St. Louis, ABF argued that the district court wrongly treated as a jurisdictional dispute the issue of whether ABF had an enforceable contract in place. ABF alleged that the “elements of a cause of action” brought under the Labor Management Relations Act, the statute that ABF cited in its initial complaint last November, are not jurisdictional but should instead have been considered on the basis of the merits of ABF’s allegations.

ABF is seeking $750 million in damages based on allegations that three rounds of wage and benefit concessions the Teamsters have granted to financially ailing YRC since 2009 violate the NMFA’s premise that it should apply equally to all of the companies that signed it.

In 2010, ABF and the Teamsters leadership reached an agreement for wage and benefit reductions similar to those the union granted to YRC. However, ABF’s rank-and-file employees rejected the proposal, leaving ABF at what it contends is a significant cost disadvantage to YRC.

ABF has maintained that it held discussions in 2007 with the Teamsters about negotiating a contract separately from the NMFA. The company says it was pressured by the union to remain part of the agreement, with the understanding that the 2008 NMFA was to be a “national standards agreement” for all signatories. The Teamsters, however, had argued that Judge Wright’s ruling validates its claim that ABF had already taken itself out of the NMFA and had no right to bring the suit. The current agreement was ratified in 2008.

InnovativeWarehouseSolutions

they said it:

I don’t care what direction FMCSA
goes, they will be sued by somebody.

It will take years to play out.

—Con-way Inc. CEO Doug Stotlar, commenting on the Federal Motor Carrier Safety Administration’s controversial proposal to change the truck driver hours-of-service rule. Stotlar’s comments came at the Stifel, Nicolaus & Co. transportation and logistics conference in Key Biscayne, Fla.