YRC Asks Eighth Circuit to Expedite Decision on Appeal Filed by ABF Freight

January 28, 2011: Citing dire financial circumstances, three subsidiaries of freight shipping firm YRC Worldwide Jan. 25 asked the U.S. Court of Appeals for the Eighth Circuit to expedite a decision on an appeal filed earlier this month by ABF Freight Systems to a federal judge's decision to dismiss its legal challenges to concessions negotiated between the company and the International Brotherhood of Teamsters (ABF Freight Sys. Inc. v. International Bhd. of Teamsters, 8th Cir., No. 11-1159, motion to expedite briefing and argument filed 1/25/11).

In the filing, the three subsidiaries—YRC, New Penn Motor Express, and USF Holland (the YRC defendants)—said their efforts to restructure their businesses and “avoid the losses of thousands of jobs in their workforce” are being hampered by the pendency of the ABF lawsuit.

Last month, Judge Susan Webber Wright of the U.S. District Court for the Western District of Arkansas granted motions to dismiss for lack of subject matter jurisdiction a lawsuit filed by ABF Freight. The suit alleged that the Teamsters and YRCW and its subsidiaries violated the National Master Freight Agreement by negotiating three concessionary amendments to the collective bargaining agreement that covers most unionized trucking employees in the country (210 DLR A-6, 11/1/10).

In her decision, Wright found that ABF bargained independent of other trucking companies in 2007 and entered into a separate collective bargaining agreement with the Teamsters apart from the one the union negotiated with YRC. Finding that ABF failed to show that it has rights under the contract it seeks to enforce, Wright said that ABF “lacks standing to bring this action and, consequently, the court lacks subject matter jurisdiction to entertain ABF's claims” (244 DLR A-2, 12/21/10).

ABF Freight Filed Appeal

ABF Freight Jan. 18 filed an appeal of Wright's decision with the Eighth Circuit. On a website dedicated to the litigation, ABF Freight said it “respectfully disagrees” with the lower court's decision, dismissing the lawsuit that sought to declare modification of the NMFA on behalf of YRCW subsidiaries “null and void. Therefore, we have chosen to exercise our right to file an appeal,” the company said.

In its motion to expedite the case, the YRC defendants said they are in financial distress and the changes to the labor agreements negotiated with the Teamsters are “a key element” of their “effort to secure new capital and to restructure its substantial existing debt load.”

“The mere pendency of this lawsuit seeking to nullify the amendments to the labor agreements—regardless of the suit's lack of merit—could substantially hamper YRC Worldwide's ongoing effort to obtain additional investment in the Company,” YRC said. “Further, if YRC Worldwide does not secure new financing and restructure its debt load by May 13, 2011 (as well as meet certain interim deadlines), the amendments to the labor agreements become void pursuant to their own terms, which is the very outcome that Appellant, the YRC defendants' biggest unionized competitor, is seeking here. This would exacerbate YRC Worldwide's already-stressed liquidity position and might ultimately force the Company to consider court-assisted restructuring alternatives.”

While the court initially set the schedule for ABF to file its brief by March 14, YRC is asking the court to shorten the time period so that ABF's brief is due Feb. 14. It also asked to have oral argument held as soon after March 21 as possible.

The Teamsters and Trucking Management Inc., which conducts the NMFA negotiations for a number of employers, told the court Jan. 27 that they have no opposition to the motion for an expedited appeal. ABF Freight had not expressed a position on the motion as of Jan. 27.

By Michelle Amber BNA Daily Labor Report.

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