By Rip Watson, Senior Reporter This story appears in the Sept. 9 print edition of Transport Topics.
Arkansas Best Corp.’s ABF Freight System unit has lost another round in its court action against the Teamsters union and YRC Worldwide Inc. over a national freight contract.
The Eighth U.S. Court of Appeals on Aug. 30 upheld a lower court ruling that dismissed a complaint filed by ABF, in which the less-than-truckload carrier alleged that concessions given to YRC by the union violated a national freight contract.
The case, which has been ongoing for almost three years, began in 2010 when ABF claimed that the 15% pay cut received by YRC’s Teamsters as a result of multiple concession agreements wasn’t allowed under the National Master Freight Agreement.
ABF began the lawsuit after the company’s Teamsters rejected a pay cut of the same amount earlier in that year and ABF was appealing an August 2012 decision in U.S. District Court in Arkansas.
“We are disappointed in the court’s ruling and the fact that YRC received three rounds of concessions from the [International Brotherhood of Teamsters] that ABF did not also receive,” said a statement posted on the website of Fort Smith, Ark.-based ABF. “We are assessing the opinion and determining whether to pursue additional options.”
The company has until Sept. 13 to decide next steps under federal appellate court procedural rules, an Arkansas Best spokeswoman said.
YRC went to the union for concessions for the first time in 2008 as its profits suffered during the recession. Losses widened during 2008 and 2009 to nearly $2 billion at YRC.
“We anticipated this outcome and are pleased with the court’s decision and supporting opinion,” Michelle Friel, executive vice president at YRC Worldwide, said in a Sept. 3 statement that noted the ABF case now has been dismissed three times in federal court.
The union didn’t respond to a request for comment.
As part of its statement, ABF noted that a separate, new contract, initially providing for a 7% wage cut, was negotiated and approved earlier this year. That five-year contract is moving toward the end of the ratification process.
Five of seven supplemental agreements were approved by the Teamsters last month after they were rejected in balloting during June.
Two supplemental agreements still haven’t been ratified by union workers.
The five supplements approved were Central Region Over-the-Road Freight, Southern Region Area Local Freight Forwarding Garage, Joint Council 40, Carolina Freight Council Over-the-Road, and New Jersey-New York Area LU-701.
The two that are pending are the Central Region Local Cartage, and the Western States Office Employees Part V, the Teamsters statement said.
Once those agreements are approved, the contract that runs into 2018 will take effect.
“We continue to work with the Teamsters’ leadership to put ABF back onto a path to profitability,” the company statement said.
Arkansas Best in the second quarter reported a profit of $5.5 million before interest and taxes at the LTL unit, reversing a first-quarter loss.
Though the sequential results improved, earnings on that basis trailed the $7.6 million in the second quarter of last year. ABF accounts for about 75% of the Arkansas Best revenue.
