ABF to again appeal $750 million lawsuit dismissal

The City Wire
31, 2012

Fort Smith-based ABF Freight System will again appeal to the U.S. Eighth Circuit Court of Appeals (St. Louis) a dismissal of its $750 million lawsuit against the Teamsters and other parties.

The appeal marks the second attempt by ABF Freight — the largest subsidiary of transportation holding company Arkansas Best Corp. — to seek another chance at a day in federal court.

ABF employs around 10,000, with roughly 7,600 of those falling under a collective bargaining unit represented by the International Brotherhood of Teamsters.

On Nov. 1, 2010, Arkansas Best Corp. — the parent company of ABF Freight System — filed a lawsuit seeking the $750 million in financial damages from alleged violations of a National Master Freight Agreement (NMFA) by the International Brotherhood of Teamsters and others.

The NMFA, implemented April 1, 2008, was designed to cause equal labor costs and other benefit payments among trucking companies with drivers represented by the Teamsters.

YRC received three rounds of wage and benefit concessions from the Teamsters, with the most recent announced Nov. 1 that includes up to $350 million annually through 2013. Previously, the Teamsters voted to approve a 15% pay cut among unionized YRC drivers. ABF has been unable to receive similar concessions from the union.

On Dec. 16, 2010, Judge Wright (Eastern District of Arkansas) dismissed the suit for lack of subject matter jurisdiction. On April 12, 2011, attorneys for ABF presented their case in the United States Court of Appeal for the Eighth Circuit (St. Louis) as to why the court should overturn a lower court ruling. On July 6, the Eighth Circuit ruled in favor of ABF. The 17-page ruling issued by the three-judge panel included several comments that favored the ABF argument that the lawsuit should be heard in the district court.

But on Aug. 1, Wright again dismissed the lawsuit, saying that ABF had failed to “exhaust the NMFA grievance procedure.”

ABF officials said Thursday they still believe their case has merit.

“ABF Freight System, Inc. filed a notice of appeal in its ongoing lawsuit against the International Brotherhood of Teamsters and various YRC subsidiaries, again seeking review in the United States Court of Appeals for the Eighth Circuit (St. Louis). We continue to believe in the strength of our case, which concerns repeated violations of the National Master Freight Agreement by the IBT and YRC,” the company noted in its statement. “The suit was originally filed in November, 2010, and successfully appealed once already, as the higher court ruled that the district court had erroneously dismissed the case. The timing of this next appeals process is uncertain but is expected to take many months.”

Galen Munroe, a spokesman for the Teamsters, said he doubted the Teamsters would issue a statement on ABF’s decision to appeal.

ABF recently notified the Teamsters that it will not negotiate a new labor contract under the NMFA.

 

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