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Federal judge again dismisses suit against YRC, Teamsters

By , - Last modified: August 3, 2012 at 11:20 AM

For the second time in two years, a federal District Court judge has dismissed an ABF Freight System Inc. lawsuit that alleged trucking competitor YRC Worldwide Inc. and the Teamsters violated a national labor agreement when they renegotiated contracts in 2010.

Arkansas-based ABF filed the suit in 2010 after the Teamsters agreement to contract concessions for Kansas-based YRC, which at the time was restructuring itself to stay out of bankruptcy proceedings. YRC and ABF have significant operations in Central Pennsylvania.

Judge Susan Webber Wright of the U.S. District Court for Western Arkansas dismissed the suit Wednesday, saying that ABF did not provide enough evidence that YRC and the union violated the national labor agreement, nor should independent tribunals be appointed to resolve its grievances, according to the ruling.

Wright had previously dismissed the suit in December 2010, but last year the Eighth Circuit Court of Appeals reversed that and sent the case back to district court for further consideration.

YRC, the parent company of Lebanon-based New Penn Motor Express Inc., applauded the dismissal, saying in a statement:

“The resolution of this lawsuit is in keeping with YRCW's committed effort to vigorously defend itself against these alleged claims by the plaintiff. YRC Worldwide has and will continue to protect and defend its reputation, as well as its services and brands.”

The 2010 restructuring and union concessions, along with more-recent subsidiary sales and leadership changes, have helped YRC improve its business. Without the union deal, credit deals with YRC’s banks wouldn’t have been approved, the company and union said in the past.

“ABF is studying the ruling and evaluating its options which include, among other avenues, taking a second appeal to the Eighth Circuit or refiling the case in the District Court,” the company wrote on a website dedicated to its legal matters.

YRC and ABF, which has terminals in the midstate, recently reported second quarter earnings.

ABF posted net income of $11.8 million, a 115 percent increase over a year ago, or 44 cents per diluted share, according to the company. Excluding transaction costs of a recent acquisition and tax benefits of $8 million, ABF’s earnings were $5.2 million, or 18 cents per share. Analysts had estimated 17 cents per share, according to Yahoo Finance.

YRC reported a net loss of $22.6 million for the second quarter, down from a loss of $43 million a year ago. The loss per diluted share was $3.21. Analysts had estimated a loss of $4.43, according to Yahoo Finance.

ABF and YRC trade their shares on the Nasdaq under the ticker symbols ABFS and YRCW, respectively.


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