May 11, 2018

ABF Teamsters ratify 63-month pact; several supplements get rejected

Agreement calls for wage increases, return of week's vacation; pension issue remains somewhat murky.

By DC Velocity Staff

By a roughly 58-42 percent margin, Teamsters union members at less-than-truckload (LTL) carrier ABF Freight voted Thursday night to ratify a new collective bargaining agreement that runs for more than five years.

The agreement, which is retroactive to April 1 and expires on June 30, 2023, calls for annual wage increases that cumulatively amount to a $2-an-hour boost, excluding any cost-of-living-adjustments, over the contract's life. Each active, full-time employee will receive a $1,000 lump-sum payment, while each so-called casual worker -those who worked at least 300 hours between Sept. 1, 2017, and March 31, 2018—will receive $500. Existing profit-sharing language will be maintained, and the company will be required to remain in all employee health and welfare funds.

ABF, a unit of Fort Smith, Ark.-based Arkansas Best Corp., also agreed to restore one week of vacation that members had to relinquish in the last contract in 2013.

In the controversial area of pension contributions, the Teamsters said that it required ABF to stay in all employee pension funds, and maintain the payment rate that existed on March 31 for the life of the contract. More than 90 percent of the 8,600 or so members are covered by pension funds that do not require an increase in contribution rates, according to the Teamsters.

Teamsters dissidents, led by the Teamsters for a Democratic Union (TDU), had a different interpretation. Ken Paff, TDU's national organizer, said in an e-mail today that pension contributions have been "frozen" for the next 63 months. Paff said that some pension funds that ABF employees belong to, mostly in the Northeast and New England, require contribution increases each year, or else the members could be expelled from their funds.

Paff said it was no surprise that workers in upstate New York, Philadelphia, New England, and the Pittsburgh-Erie, Pa., areas overwhelmingly rejected their respective supplemental agreements that accompany the national contract. All supplements must be ratified for the national contract to take effect.

Mainstream Teamsters leadership, which has a cobra-and-mongoose-like relationship with TDU, has said ABF will make payments equal to $6 an hour into a Teamsters 401(k) savings plan on behalf of each affected employee, should any pension fund decline to accept the negotiated contribution rate and expel ABF.

The status of the ABF pension plan was the hot-button issue in the talks. The company made it clear that its pension expenses are way above those incurred by its chief unionized rival, YRC Worldwide Inc., whose members accepted draconian pension cuts in 2009 and 2010 to help save the financially battered company. The lower pension levels at YRC remain in place. The YRC-Teamsters contract expires next year.

ABF faces competitive challenges because its cost structure is so much higher than YRC's, company officials have said. In a brief statement today, ABF called the contract "affordable for the company and fair to employees."

TDU said ABF's rank and file were dissatisfied with the contract proposal, but voted to accept it because they didn't believe union leaders planned to deliver more. The group also alleged that Teamsters executives led by General President James P. Hoffa used the threat of a strike not to pressure the company, but to scare workers. The Hoffa administration "repeatedly stated that a rejection of the first offer would not lead to more bargaining, but an immediate (and ill-prepared) strike," the group said.

In a historical footnote, this was the first time in Teamsters history that a contract vote was conducted via a digital format.

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