Court Affirms Dismissal of Arkansas Best Complaint Against Union, YRC

Nathalie Tadena
The Wall Street Journal
03, 2013

A federal appeals court has affirmed a lower court's decision to dismiss a complaint from an Arkansas Best Corp. (ABFS) unit against the International Brotherhood of Teamsters union, YRC Worldwide Inc. (YRCW) and other parties for alleged violations of a collective bargaining agreement governing most unionized trucking companies.

Arkansas Best shares were down 7% to $24.73 in recent trading.

The trucking company's largest subsidiary, ABF Freight System Inc., first filed a suit in November 2010 against YRC, alleging the series of labor concessions by the Teamsters to help keep YRC afloat over the last few years violated the National Master Freight Agreement. The suit had previously been dismissed twice, but appealed both times. The Teamsters union represents workers at YRC and Arkansas Best.

In a regulatory filing Friday, ABF said it is disappointed in the U.S. Court of Appeals for the Eighth Circuit's ruling and that YRC received three rounds of concessions from the Teamsters union that ABF did not receive. ABF said is assessing the court's opinion and determining whether to pursue additional options.

ABF noted that, since 2010, it has negotiated its own separate five-year contract agreement with the Teamsters union, which was ratified by a majority of its Teamster employees in June. The lawsuit and recent contract negotiations were separate events, the company said.

Arkansas Best had been approached by YRC in late March about a deal that would have combined the only two big independent players with unionized drivers in the less-than-truckload sector, however it rejected the deal. Less-than-truckload carriers combine loads from multiple customers onto single trucks.

The industry was hit hard during the last recession, and debt-laden YRC narrowly avoided being pushed into bankruptcy as dozens of other firms were forced to close, but the market has in recent months stabilized.

Arkansas Best's stock has more than doubled this year to two-year highs.

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