A federal district court judge in Arkansas Thursday night threw out a lawsuit filed by less-than-truckload carrier ABF Freight System Inc. that alleged the Teamsters Union and rival YRC Worldwide Inc. violated provisions of the National Master Freight Agreement (NMFA), the collective bargaining compact that governs most of the nation's unionized trucking companies.
The ruling by Judge Susan Webber Wright deals a potentially crippling blow to ABF's efforts to seek legal redress and $750 million in damages based on allegations that three rounds of wage and benefit concessions the Teamsters have granted to YRC over the past two years violate the five-year agreement's basic premise that it should apply equally to all the companies that signed it.
Judge Wright ruled that ABF did not have standing to sue YRC and the union. The Teamsters said in a statement Thursday night that the 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.
ABF spokesman Russ Aikman said the company is "disappointed" in the ruling and continues to believe the arguments made in its Nov. 1 lawsuit remain "strong." Aikman said the company is mulling an appeal with the U.S. Court of Appeals for the Eighth Circuit.
Teamster General Counsel Brad Raymond said the ruling "should send a strong message to ABF that its attempts to interfere with the contractual agreement between [YRC] and its Teamsters-represented employees must end."
Earlier this year, ABF and the Teamster leadership reached an agreement for wage and benefit reductions similar to what 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.
In its suit, ABF said it had held discussions in 2007 with the Teamsters about negotiating a contract separately from the NMFA. However, the company was pressured by the union to remain, with the understanding that the 2008 NMFA was to be a "national standards agreement" for all the companies that signed it.
Thomas R. Wadewitz, transport analyst for JPMorgan Chase, said the ruling clouds ABF's path toward changing its unionized cost structure. "While [ABF] could try to return to the negotiating table with Teamsters leadership, we suspect that the Teamster leadership would be reluctant to quickly pursue discussions" in the wake of the lawsuit, Wadewitz said.