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YRC Unionized Workers Approve Contract; Implementation Held Up

FreightWaves

Unionized workers at three of less-than-truckload (LTL) carrier YRC Worldwide, Inc., (NASDAQ: YRCW) units voted to approve a five-year collective-bargaining agreement, it was disclosed late on Friday, May 3.

However, one of 27 supplemental agreements, the Joint Council 40 supplement, failed to pass. Because no new Teamster contracts can be implemented until all supplements and local riders to a master agreement are ratified, the Teamster-YRC contract will be held up until the matter with Joint Council 40 is resolved.

The contract was approved by 60 percent of eligible Teamsters, the union said on a conference call. Of 21,724 members who were eligible to vote, 17,005 members cast ballots for a 77.8 percent turnout, the Teamsters said. The contract covers workers at YRC Freight, YRC's long-haul LTL unit, and at Holland and New Penn Motor Express, two of its three regional units. Workers at the third YRC regional unit, Reddaway, are governed by a separate contract.

Approval had been expected, even though many rank-and-file didn't care much for the language in the contract. According to a source close to YRC workers, many were worried that the company's future, along with their livelihoods, would be at risk if the contract were rejected. Ernie Soehl, head of the Teamsters' freight division, had warned that the three units could go out of business by the end of May should the proposal be defeated. According to Soehl, YRC's customers, who have been closely watching the process, would respond to a "no" vote by pulling freight from the three carriers quickly and en masse.

A tentative contract had been negotiated at the end of March, just days before the prior pact was set to expire. Both sides agreed to extend the contract's expiration date to May 31 to give the rank-and-file time to review the language.

The contract, which will be retroactive to April 1, 2019, calls for a $4 per hour wage increase spread over five years, equal to an 18 percent hike increase over the contract's life. YRC will increase its contribution to the workers' health and welfare plan, and will return of one week's paid vacation that had been conceded in 2010.

The agreement establishes a class of non-Commercial Driver License driver who would handle local cartage rather than having YRC contract out the work to a non-union vendor. It also protects the higher wage of a CDL driver performing non-CDL driver functions. The pact prohibits the use of autonomous vehicles or drones for transporting freight.

The agreement allows Holland to use purchased transportation, a first for the unit. However, it caps purchased transport use at 8 percent of Holland's total annual miles driven. It also empowers union negotiators to unilaterally curb or eliminate the purchased transportation programs at Holland and YRC Freight, where it has been in effect on a limited scale for the past five years.

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