• Full-Text Search
• Filing Company
  • YRC WORLDWIDE INC.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) November 16, 2010

YRC Worldwide Inc.

(Exact name of registrant as specified in its charter)

10990 Roe Avenue, Overland Park, Kansas 66211

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code (913) 696-6100

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Investor Presentation

On November 17, 2010, William D. Zollars, Chairman, President and Chief Executive Officer, and Sheila K. Taylor, Executive Vice President and Chief Financial Officer, of YRC Worldwide Inc. (the “Company”) will deliver a Company presentation at the Stephens Fall Investment Conference. The presentation will be available on audio webcast through the Company’s website, www.yrcw.com. A copy of the slide show is attached hereto as Exhibit 99.1.

ABF Lawsuit

On November 16, 2010, YRC Inc., New Penn Motor Express, Inc. and USF Holland Inc. (each a “subsidiary” and collectively, the “subsidiaries” of the Company) filed a motion to dismiss the complaint filed by ABF Freight System, Inc. (“ABF”) on November 1, 2010 in the U.S. District court for the Western District of Arkansas. In the motion to dismiss, the subsidiaries asked the court to dismiss ABF’s complaint, which alleges a violation of the National Master Freight Agreement (the “NMFA”) between the subsidiaries and the International Brotherhood of Teamsters, because ABF is not a party to the NMFA and, therefore, has no standing to challenge the NMFA or its amendments. A copy of the memorandum in support of motion to dismiss is attached hereto as Exhibit 99.2.

Forward-Looking Statements

The memorandum in support of motion to dismiss attached to this Current Report on Form 8-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The words “will” and similar expressions are intended to identify forward-looking statements.

The Company’s expectations regarding the lawsuit filed by ABF are only its expectations regarding this matter. The actual outcome of ABF lawsuit is dependent on final resolution of the claims through the courts or grievance process under the Company’s labor agreement.

The Company’s expectations regarding the benefits from the new labor contract are only its expectations regarding this matter. Actual cost savings would be dependent on actual levels of employment.

(d) Exhibits

2

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

3

EXHIBIT INDEX

4

Investor Presentation November 2010 Exhibit 99.1

2 Overview Overview • Opening Comments • Strategy • Stakeholder Support • New Labor Contract • Operating Improvements and Key Milestones • Liquidity • Summary

3 Business Segments Business Segments • The company’s National and Regional networks provide the most comprehensive North American network and flexible solutions to meet its customers’ diverse transportation needs • Sale of YRC Logistics allows YRCW to focus on its core businesses • Customers maintain access to logistics services via commercial services agreement Transportation & Logistics Transportation & Logistics North American LTL & TL North American LTL & TL U.S. National LTL Inter/Intra-Canada LTL Truckload Regional LTL Regional LTL Global Logistics Global Logistics Western U.S. & Canada Central U.S. & Canada Northeast  U.S. & Canada China Ground, Global Forwarding Jiayu Jing Jiang 73% $1.3 Billion     27% YRC Worldwide Inc. 2009 Revenue: $4.9 Billion (1) (1) Adjusted to exclude $.4 billion revenue from YRC Logistics segment reported as discontinued operations effective 2Q 2010. $3.6 Billion $40 million / $265 million

4 National and Regional Networks National and Regional Networks 4 Strategy: Achieve competitive cost base and enhanced customer mix management, resulting in improved earnings and cash flows

Stakeholder Support Stakeholder Support 5 • Stakeholders alignment to ensure future success • Liquidity programs • Sale of assets • Deferral of pension contributions • Lender flexibility • Addressed 2010 bond obligations • Converted $470 million of bonds to equity • Refinanced remaining bonds with  $70 million of new 6% notes • Competitive cost base • Customer confidence

6 Labor Contract Overview Labor Contract Overview • Extended by two years from 2013 to March 31, 2015 • Re-entry of YRCW companies into multi-employer pension plans in June 2011, at a more affordable level of contribution • Sustains the current competitive cost structure and improves future operating leverage, as work rule changes drive cost efficiencies to more than offset returning pension contributions and to promote service enhancements • Addresses the long-term market competitiveness of YRCW, which is designed to protect jobs, enable long-term growth and generate financial returns to its stakeholders • ABF lawsuit update

7 Key Financial Recovery Milestones…to Date Key Financial Recovery Milestones…to Date • 2Q and 3Q 2009 – sequential improvement in adjusted EBITDA • 4Q 2009 – sequential and year-over-year improvement in adjusted EBITDA • March 2010 – volume growth returns • April 2010 – breakeven adjusted EBITDA • 2Q 2010 – positive adjusted EBITDA quarter, first since 3Q 2008 • 3Q 2010: • Second consecutive quarter of positive adjusted EBITDA • Positive cash flow from operating activities • Regional operating ratio 97.6 • National operating ratio 102.9 • YRCW operating ratio improved 8.8 year-over-year

Year-Over-Year Operating Improvement Year-Over-Year Operating Improvement • Cost actions, price discipline, and customer mix management • Expect YRCW to be adjusted EBITDA positive in 4Q 2010 Adjusted EBITDA is a non-GAAP measure that reflects the company’s earnings before interest, taxes, depreciation, and amortization expense, and further adjusted for letter of credit fees, professional restructure fees, discontinued operations, and other items as defined in the company’s Credit Agreement. Adjusted EBITDA is used for internal management purposes as a financial measure that reflect the company’s core operating performance and is used by management to measure compliance with financial covenants in the company’s Credit Agreement. This financial measure should not be construed as a better measurement than operating income as defined by generally accepted accounting principles. See Pages15 and16 for reconciliations of GAAP measures to non-GAAP financial measures. 8 Operating Loss (in millions) Adjusted EBITDA (in millions)

Tonnage Per Day Trends • Sequential volume improvement trends • National up 1.2% from 2Q 2010; second consecutive sequential increase • Regional up 2.1% from 2Q 2010; year-over-year up 9% • Market share stabilized during 2Q & 3Q; now positioned for future profitable growth 9

10 Liquidity Liquidity • Stable liquidity position • Proactive actions to fund working capital for revenue growth • DSO improvement 3 days year-over-year • Renewal of $325 million asset-backed securitization through October 2011 Note:  Revolver reserves are subject to the terms of the company’s credit agreement with its lenders.

11 Summary Summary • Strategic focus on core business • Improving operational performance • Stakeholder alignment • Customer confidence

12 Appendix

2010 Expectations 2010 Expectations • YRCW positive adjusted EBITDA and be well within credit agreement financial covenants in 4Q 2010 • Gross capital expenditures of $20 to $30 million • Excess property sales of $70 to $80 million • Sale and financing leasebacks approximately $50 million • Effective income tax rate of 3% 13

Common Share Recap Pre-Split and Post-Split Common Share Recap Pre-Split and Post-Split 14 Authorized Outstanding (1) 6% Notes (2) Options/RSU’s (3) Available Jun 30 2 billion 1.124 billion 202 million/ $70M 350 million 324 million Post 1:25 Split Jun 30 (pro forma) 80 million 45 million 8 million 14 million 13 million Sep 30 80 million 47.5 million 5.5 million/ $69.410M 14 million 13 million 1) Per third quarter 2010 10-Q 2) Pro forma amounts, assuming $70m notes are fully converted into shares, inclusive of interest and make-whole amounts paid in shares; represents an ‘all-in’ conversion rate of approximately $8.67/share ($0.35/share pre-split) a) In August 2010, the company temporarily modified the conversion ratio to $0.25/share ($0.01/share pre-split) and issued 2.4m shares (59m pre-split) in conversion of $590,000 of notes. In addition, the company issued 0.2 m shares (5.5m pre-split) for semi-annual interest due August 15, 2010. b) Remaining 5.5m shares relate to outstanding notes of $69.41m or an ‘all-in’ conversion ratio of approximately $12.61 per share for future conversions (approximately $.50/share pre-split). 3) Includes June 2010 Teamster option awards of 10.5m (264m pre-split) with a strike price of $12/share ($0.48/share pre-split), June 2010 shareholder approval of 2.7m shares (67m pre-split) for the non-union equity plan which are available for future equity awards and 2009 employee awards (union and non-union) of 0.6m (15m pre-split).

Consolidated Adjusted EBITDA Consolidated Adjusted EBITDA 15 For the Three and Nine Months Ended September 30 2010 2009 2010 2009 Operating revenue 1,136,836 $            1,203,977 $            3,243,081 $         3,820,916 $         Operating Ratio, as adjusted 101.7% 110.5% 105.5% 120.4% Reconciliation of operating loss to adjusted EBITDA: Operating loss (18,836) $                 (126,648) $              (203,726) $           (799,556) $           Union equity awards -                               -                               24,995                  20,639                  Operating loss, as adjusted (18,836)                    (126,648)                  (178,731)              (778,917)              (Gains) losses on property disposals, net (3,429)                      (11,138)                    3,183                    (10,579)                 Impairment charges -                               -                               5,281                    -                            Depreciation and amortization 49,785                     58,346                     150,491               181,173               Equity based compensation expense 2,211                       2,032                       5,545                    8,147                    Letter of credit expense 8,321                       8,838                       24,943                  23,301                  Restructuring professional fees 6,594                       n/a 15,936                  n/a Reimer Finance Co. dissolution (foreign exchange) n/a n/a 5,540                    n/a    Other nonoperating, net (312)                         (2,018)                      1,029                    (4,495)                   Adjusted EBITDA 44,334 $                  (70,588) $                 33,217 $              (581,370) $           Operating Ratio, as adjusted is calculated as 100 minus the result of dividing operating income, as adjusted by operating revenue or plus the result of dividing operating loss, as adjusted by operating revenue, and expressed as a percentage. Three Months Nine Months SUPPLEMENTAL FINANCIAL INFORMATION YRC Worldwide Inc. and Subsidiaries (Amounts in thousands) (Unaudited)

2010 Consolidated Operating Cash Flows 2010 Consolidated Operating Cash Flows 16 YRC Worldwide Inc. and Subsidiaries (Amounts in thousands) (Unaudited) 1Q 2010 2Q 2010 3Q 2010 Reconciliation of Adjusted EBITDA to net cash from (used in) operating activities: Adjusted EBITDA (51,034) $      39,917 $       44,334 $       Add back amounts included in Adjusted EBITDA: Restructuring professional fees n/a (9,342)           (6,594)           Discontinued operations and permitted dispositions (2,135)           (7,421)           1,347            Cash interest (10,876)         (10,062)         (11,009)         Working capital cash flows, net 1,063            (47,870)         (22,678)         Net cash used in operating activities before income taxes (62,982)         (34,778)         5,400            Cash income tax refunds, net 81,272          2,016            (253)              Net cash (used in) provided by operating activities 18,290 $       (32,762) $      5,147 $

17 Forward-Looking Statements Forward-Looking Statements This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The words “believe,” “expect,” “continue,” and similar expressions are intended to identify forward-looking statements. It is important to note that the company’s actual future results could differ materially from those projected in such forward-looking statements because of a number of factors, including (among others) our ability to generate sufficient cash flows and liquidity to fund operations, which raises substantial doubt about our ability to continue as a going concern, inflation, inclement weather, price and availability of fuel, sudden changes in the cost of fuel or the index upon which the company bases its fuel surcharge, competitor pricing activity, expense volatility, including (without limitation) expense volatility due to changes in rail service or pricing for rail service, ability to capture cost reductions, changes in equity and debt markets, a downturn in general or regional economic activity, effects of a terrorist attack, labor relations, including (without limitation) the impact of work rules, work stoppages, strikes or other disruptions, any obligations to multi-employer health, welfare and pension plans, wage requirements and employee satisfaction, and the risk factors that are from time to time included in the company’s reports filed with the SEC. The company’s expectations regarding the rate and timing of pricing and revenue mix improvements are only its expectations regarding these matters. Actual rate and timing of pricing and revenue mix improvements could differ based on a number of factors including (among others) general economic trends and excess capacity within the industry, and the factors that affect revenue results (including the risk factors that are from time to time included in the company’s reports filed with the SEC). The company’s expectations regarding the timing and degree of market share growth are only its expectations regarding these matters. Actual timing and degree of market share growth could differ based on a number of factors including (among others) the company’s ability to persuade existing customers to increase shipments with the company and to attract new customers, and the factors that affect revenue results (including the risk factors that are from time to time included in the company’s reports filed with the SEC). The company’s expectations regarding the impact of, and the service and operational improvements and collateral and cost reductions due to, the integration of Yellow Transportation and Roadway, improved safety performance, right-sizing the network, consolidation of support functions, the company’s credit ratings and the timing of achieving the improvements and cost reductions could differ materially from actual improvements and cost reductions based on a number of factors, including (among others) the factors identified in the preceding and following paragraphs, the ability to identify and implement cost reductions in the time frame needed to achieve these expectations, the success of the company’s operating plans and programs, the company’s ability to successfully reduce collateral requirements for its insurance programs, which in turn is dependent upon the company’s safety performance, ability to reduce the cost of claims through claims management, the company’s credit ratings and the requirements of state workers’ compensation agencies and insurers for collateral for self- insured portions of workers’ compensation programs, the need to spend additional capital to implement cost reduction opportunities, including (without

Forward-Looking Statements Forward-Looking Statements 18 limitation) to terminate, amend or renegotiate prior contractual commitments, the accuracy of the company’s estimates of its spending requirements, changes in the company’s strategic direction, the need to replace any unanticipated losses in capital assets, approval of the affected unionized employees of changes needed to complete the integration under the company’s union agreements, the readiness of employees to utilize new combined processes, the effectiveness of deploying existing technology necessary to facilitate the combination of processes, the ability of the company to receive expected price for its services from the combined network and customer acceptance of those services. The company's expectations regarding the lawsuit filed by ABF are only its expectations regarding this matter. The actual outcome of ABF lawsuit is dependent on final resolution of the claims through the courts or grievance process under the company's labor agreement. The company's expectations regarding the amount and timing of receipt of a working capital adjustment in connection with the sale of a majority of its Logistics business are only its expectations regarding these matters. The actual amount and timing of receipt of a working capital adjustment is dependent on final resolution of the amount with the buyer of the Logistics business in accordance with the related purchase agreement. The company’s expectations regarding re-entry into multi-employer pension funds to which it contributes are only its expectations regarding this matter. Whether multi-employer pension funds to which the company contributes approve the company’s re-entry into the funds and the timing and terms and conditions of any re-entry is dependent upon approval by the affected funds. Actual contributions to multi-employer pension funds are also affected by levels of employment. The company’s expectations regarding the benefits from the new labor contract are only its expectations regarding this matter. The wage, benefit and work rule concessions in the new labor contract may cease if a committee representing the Teamsters (“TNFINC”) exercises its rights in the new labor contract described below. • TNFINC was given the right to approve certain changes of control applicable to the company. If TNFINC approval is not received, TNFINC may declare the wage, benefit and work rule concessions null and void on a prospective basis. • In the event of a bankruptcy of the company, TNFINC may declare the wage, benefit and work rule concessions null and void.

Forward-Looking Statements Forward-Looking Statements 19 • The company expects to begin discussions to restructure the debt under its credit agreement, which may include additional capital investment (debt and/or equity) by third parties in a recapitalization. The new labor contract provides the following: o TNFINC would have the right to approve the various transactions comprising the restructuring/recapitalization. o If TNFINC’s approval is not obtained, TNFINC may declare the wage, benefit and work rule concessions null and void on a prospective basis, and the company would owe its Teamster employees an amount equal to the concessions that in fact benefited the company prior to the termination. o TNFINC would have significant rights to participate in the restructuring/recapitalization discussions. o In deciding whether to give its approval to a restructuring/recapitalization, TNFINC could demand on behalf of Teamster represented employees of the company’s subsidiaries additional compensation if negotiated performance triggers are met, equity participation, specified terms in the restructuring, specified indebtedness levels resulting from the transactions, governance rights and financial viability criteria. o The company is required to enter into definitive agreements to effect the restructuring/recapitalization by December 31, 2010 and close those transactions by March 31, 2011, or in each case, such later date as TNFINC would agree and, in each case, on terms and conditions that TNFINC approves. The company’s expectations regarding ratification of a new labor agreement for Reddaway and the timing of any ratification are only its expectations regarding this matter. Ratification of a new labor agreement for Reddaway is dependent on a majority of Reddaway's union employees who are eligible to vote to approve the new labor agreement. The company’s expectations regarding its ability to replace the ABS with a new facility are only its expectations regarding this matter. Whether the company is able to replace the ABS and the terms of any replacement facility are dependent upon a number of factors including (among others) the company reaching agreement with interested lenders and closing such transaction on negotiated terms and conditions. The company’s expectations regarding multi-employer pension plan reform are only its expectations regarding this matter. The impact to the company and the multi-employer pension plans to which it contributes of such reform is subject to a number of conditions, including (among others) whether Congress passes legislation to reform multi-employer pension plans and the timing of, and provisions included in, such legislation.

Forward-Looking Statements Forward-Looking Statements 20 The company’s expectations regarding the continued support of its stakeholders are only its expectations regarding this matter. Whether the company’s stakeholders continue to support the company including (among other things) to continue deferral arrangements in 2011 or to restructure obligations owed to such stakeholders is subject to a number of conditions including (among other things) the outcome of discussions with such stakeholders, whether requested support meets their requirements and the factors identified in the preceding paragraphs. The company’s expectations regarding future asset dispositions and sale and financing leasebacks of real estate are only its expectations regarding these matters. Actual dispositions and sale and financing leasebacks will be determined by the availability of capital and willing buyers and counterparties in the market and the outcome of discussions to enter into and close any such transactions on negotiated terms and conditions, including (without limitation) usual and ordinary closing conditions such as favorable title reports or opinions and favorable environmental assessments of specific properties. The company’s expectations regarding liquidity, working capital and cash flow are only its expectations regarding these matters. Actual liquidity, working capital and cash flow will depend upon (among other things) the company’s operating results, the timing of its receipts and disbursements, the company’s access to credit facilities or credit markets, the company’s ability to continue to defer interest and fees under the company’s credit agreement and ABS facility and interest and principal under the company’s contribution deferral agreement, the continuation of the wage, benefit and work rule concessions under the company's modified labor agreement and temporary cessation of pension contributions, and the factors identified in the preceding paragraphs. The company’s expectations regarding its capital expenditures are only its expectations regarding this matter. Actual expenditures could differ materially based on a number of factors, including (among others) the factors identified in the preceding paragraphs. The company’s expectations regarding its compliance with its credit agreement covenants are only its expectations regarding these matters. Whether the company satisfies the covenants under its credit agreement is subject to a number of factors, including (among others) the factors identified in the preceding paragraphs. The company’s expectations regarding its effective tax rate are only its expectations regarding this rate. The actual rate could differ materially based on a number of factors, including (among others) variances in pre-tax earnings on both a consolidated and business unit basis, variance in pre-tax earnings by jurisdiction, impacts on our business from the factors described above, variances in estimates on non-deductible expenses, tax authority audit adjustments, change in tax rates and availability of tax credits. The company’s expectations regarding its ability to complete its comprehensive recovery plan are only its expectations regarding these matters. Whether the company is able to complete its comprehensive recovery plan is dependent upon a number of factors including (among others) the company reaching agreement with its stakeholders and interested investors and closing transactions on negotiated terms and conditions, including (without limitation) any closing conditions that the company’s stakeholders and investors may require.

Exhibit 99.2

IN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF ARKANSAS

FORT SMITH DIVISION

MEMORANDUM IN SUPPORT OF MOTION TO

DISMISS FOR LACK OF JURISDICTION

Preliminary Statement

Defendants YRC, Inc., New Penn Motor Express, Inc., and USF Holland, Inc. (together, “YRC”) are trying to weather the effects of an economic recession of a magnitude not seen in decades. To that end, YRC and its employees (through their union, the International Brotherhood of Teamsters) have agreed to make painful compromises on both sides in an effort to reduce costs. On September 24, 2010, YRC and the Union amended their labor agreement. YRC’s employees ratified the amendment on October 30, 2010. However, the amendment is contingent on YRC securing additional funding for its operations by December 31, 2010.

Knowing that regardless of whether it wins or loses here, the pendency of a lawsuit alone will make it more difficult for YRC to secure the financing on which the amendment to YRC’s labor contract is contingent, Plaintiff ABF Freight System has sued, asking the Court to insert itself into the grievance procedures articulated in the YRC/Teamsters labor agreement or, in the alternative, asking the Court to nullify the amendments to the labor agreement and award

Plaintiff “damages” because YRC’s labor costs will be cheaper than Plaintiff’s. But Plaintiff has no rights under the YRC/Teamsters labor agreement or the amendments to it. Plaintiff is not a party to the agreement or its amendments. Plaintiff is not a member of the multi-employer bargaining group that negotiated the agreement. Thus, Plaintiff is a stranger to the labor agreements between YRC and the Union, and lacks standing to sue to enforce them.

Plaintiff’s own actions prove the point. Earlier this year, Plaintiff negotiated an amendment to its own labor agreement with the Union. It did not seek YRC’s permission to do so, did not negotiate on YRC’s behalf, and the resulting amendment to Plaintiff’s labor agreement did not apply to YRC. (YRC did not complain about or object to the amendment in any manner.) Plaintiff’s employees ultimately voted to reject the amendment, but Plaintiff’s actions make clear that it does not view itself as party to a contract with YRC or as a part of the multi-employer bargaining unit that negotiated YRC’s labor agreement. Still, Plaintiff now apparently wants a “heads I win/tails you lose” situation where it can negotiate deals with the Union that benefit only it, but YRC cannot. There is no support in the law for such a manifestly unfair result.

Nor has Plaintiff been injured. Although the amendment to the YRC/Teamsters labor agreement may lower YRC’s labor costs below Plaintiff’s, the Union offered Plaintiff the same deal and Plaintiff declined. Plaintiff did so apparently because it was unwilling to make the same kinds of sacrifices that YRC and its executives made in exchange for the Union’s concessions—including cutting the compensation of all YRC’s non-union employees and executives commensurate with the salary cuts that YRC’s union employees have agreed to take. Thus, Plaintiff’s position is one of its own making. It cannot claim to have suffered injury at the hand of the Union, which offered it the same deal as YRC, or YRC, with which it has no contractual relationship at all.

2

This lawsuit is not about one employer wanting the same lower labor costs that a competitor received. Rather, it is about Plaintiff attempting to misuse the legal system to force YRC’s labor costs to remain higher—at a level that neither YRC’s union nor YRC’s employees are requesting—to try to injure its competitor. This inappropriate action should be rejected. YRC hereby respectfully moves the Court to dismiss this lawsuit pursuant Federal Rule of Civil Procedure 12(b)(1) for lack of jurisdiction. Plaintiff does not have standing to pursue this lawsuit because it is not a party to the labor agreement between YRC and the Union.

Background

Plaintiff and YRC are freight trucking companies whose employees are represented by labor unions—in both cases the International Brotherhood of Teamsters. (Compl. ¶ 18; Smid Decl. ¶ 3¹) YRC employs more than 36,000 people and serves more than 350,000 customers. (Taylor Decl. ¶ 3²) Prior to April 1, 2008, both Plaintiff and YRC were members of a multi-employer bargaining group and party to the same labor agreement.³ (Smid Decl. ¶ 3) The multi-employer bargaining group negotiated as one with the Union and at the end of the process the members of the group all became party to the resulting agreement, which was referred to as the National Master Freight Agreement. (Id.) (Although the National Master Freight Agreement has a formalistic title, it is simply a labor agreement between employers and employees like any other.) That labor agreement was in effect from April 1, 2003 until March 31, 2008. (Id.; Compl. ¶ 112)

3

In 2007, the multi-employer bargaining group—represented by its negotiator, defendant Trucking Management, Inc., or “TMI”—and the Union prepared to begin negotiating a new agreement that would replace the soon-to-expire 2003-2008 labor agreement. (Smid Decl. ¶ 4) Prior to the start of the negotiations, however, Plaintiff withdrew from the multi-employer bargaining group. (Id. at ¶ 5; Compl. ¶ 36) In a letter dated August 13, 2007, Plaintiff’s President and CEO wrote to TMI and the Union’s negotiator that “[i]t is ABF’s intent not to grant in any way (including, without limitation, oral representation or course of conduct) to TMI any authority to collectively bargain on behalf of ABF with the International Brotherhood of Teamsters and its local unions.” (Smid Decl. ¶ 5; Compl. ¶ 117) The letter continued, explaining that “ABF will not consider itself bound to any such agreement reached between TMI and the IBT. ABF has unequivocally decided to negotiate its own [agreement] with the IBT and will separately give notice to the IBT that it has withdrawn from the TMI multi-employer bargaining unit for purposes of prospective bargaining with the IBT.” (Smid Decl. ¶ 5) As it promised, Plaintiff then sent a letter to the Union conveying the same information. (Id. at ¶ 6) After its withdrawal, ABF never participated in further bargaining group meetings and never expressed any interest in rejoining the bargaining group. (Id. at ¶ 7)

As a result, the multi-employer bargaining group negotiated a new agreement with the Union without Plaintiff’s participation. (Smid Decl. ¶ 8; Compl. ¶ 124) The result of the effort was the current labor agreement (which, like its predecessor, was also referred to as the National Master Freight Agreement), which is effective from April 1, 2008 through March 31, 2013. (Smid Decl., Ex. C)

4

After Plaintiff’s departure from the multi-employer bargaining group, Plaintiff negotiated its own agreement with the Union to replace the expiring 2003-2008 labor agreement. (Compl. ¶ 116) Ultimately, Plaintiff and the Union agreed that their labor agreement would simply adopt most of the labor agreement that YRC’s multi-employer bargaining group had already negotiated. (Compl. ¶¶ 39-40) Consequently, on January 30, 2008, Plaintiff executed an agreement titled an “interim agreement,” which incorporated the terms of the YRC/Teamsters labor agreement except as specifically modified by future agreements between Plaintiff and the Union. (Smid Decl. ¶ 9) This “interim agreement” was an agreement independent of the YRC labor agreement. (Id.)

In late 2007, the U.S. economy entered a severe recession, and YRC’s business suffered as a result. Specifically, YRC’s operating revenue fell by $680.1 million (7.1%) from 2007 to 2008 and by $3.66 billion (40.9%) from 2008 to 2009. (Taylor Decl. at ¶ 7) Last year, YRC posted an operating loss of $844 million. (Id.) Consequently, YRC and the Union negotiated a series of three amendments to their labor agreement that would assist YRC (and by extension its employees) to survive. The amendments were executed on November 25, 2008, July 9, 2009, and September 24, 2010. (Smid Decl., Exs. D-F) Through the amendments, the Union agreed to accept compensation reductions that will create $590-600 million in annual cost savings for YRC. (Taylor Decl. ¶ 12) In exchange for its employees’ agreement to accept lower wages, YRC agreed that all of its non-union employees and executives would receive equal treatment, reducing their salaries and benefits. (Smid Decl. ¶ 11) YRC also agreed to involve the Union in its restructuring process, including agreeing to the appointment of an outside Chief Restructuring Officer approved by the Union, giving the Union the right to hire an independent auditor to audit the Company’s compliance with the amendments to the labor agreements (to ensure that non-union

5

employees were accepting the equal-treatment wage and benefit reductions), and giving the Union a seat on YRC Worldwide’s board of directors. (Id.) Significantly, the third amendment includes a caveat: YRC must obtain new capital to finance its business before December 31, 2010. (Taylor Decl. ¶ 13) If YRC fails to do so, the amendments to the labor agreement become void absent an extension. (Id.)

Independent of YRC’s amendments to its labor agreement, Plaintiff also negotiated with the Union to amend its own labor agreement. Specifically, in early 2010, expressly citing the first two amendments negotiated by YRC as a model, Plaintiff negotiated a 15% salary reduction with the Union. (Smid Decl. ¶ 12) However, Plaintiff’s employees voted to reject the proposed amendment. (Id.) Plaintiff did not consult YRC in negotiating this amendment. (Id. at ¶ 13) Plaintiff did not purport to negotiate the amendment on YRC’s behalf or include YRC’s employees in the negotiate wage reductions. (Id.) YRC did not object to the amendment or argue in any fashion that it was inappropriate. (Id.)

After YRC’s most recent amendment to its labor agreement was announced, Plaintiff contacted the Union to discuss Plaintiff’s desire for additional concessions. (Smid Decl. ¶ 14) The Union offered to Plaintiff the same deal that it agreed to with YRC. (Id.) Plaintiff refused the deal.⁴ (Id.) Instead, Plaintiff brought the instant lawsuit, which purports to state two counts. In Count I of the complaint, Plaintiff asks this Court to appoint a neutral grievance panel to hear its grievance regarding the amendments that YRC has negotiated with the Union. In Count II of

6

the complaint, Plaintiff asks the Court to nullify the three amendments to the YRC labor agreement or to award Plaintiff $750 million in damages. Plaintiffs’ claims fail as a matter of law.

Standard of Review

Federal Rule of Civil Procedure 12(b)(1) allows a party to move to dismiss for lack of subject matter jurisdiction prior to filing a responsive pleading to a plaintiff’s complaint. On such a motion, “the plaintiff will have the burden of proof that jurisdiction does in fact exist.” Mortensen v. First Federal Savings & Loan Ass’n, 549 F.2d 884, 891 (3d Cir. 1977) quoted and adopted by Osborn v. United States, 918 F.2d 724, 730 (8th Cir. 1990).

Unlike on motions to dismiss pursuant to Rule 12(b)(6), on motions under Rule 12(b)(1) “no presumptive truthfulness attaches to the plaintiff’s allegations, and the existence of disputed material facts will not preclude the trial court from evaluating for itself the merits of jurisdictional claims.” Osborn, 918 F.2d at 730 (quoting Mortensen, 549 F.2d at 891). This is because “[j]urisdictional issues, whether they involve questions of law or of fact, are for the court to decide.” Osborn, 918 F.2d at 729. As a result, Rule 12(b)(1) motions may be supported by evidence. See Appley Bros. v. United States, 164 F.3d 1164, 1170 (8th Cir. 1999) (“In determining its jurisdiction, a district court may make findings of fact.”); Gillert v. U.S. Dep’t of Education, No. 08-6080, 2010 WL 3582945 at *2 (W.D. Ark. 2010) (“Rule 12(b)(1) allows the Court to dismiss any and all claims over which, either on their face or in light of outside evidence, it lacks proper subject matter jurisdiction.”) (emphasis added).

A lack of standing to bring an action constitutes a lack of subject matter jurisdiction. See Faibisch v. University of Minnesota, 304 F.3d 797, 801 (8th Cir. 2002) (“[I]f a plaintiff lacks standing, the district court has no subject matter jurisdiction.”).

7

Argument

The YRC/Teamsters labor agreement was negotiated and executed by a multi-employer bargaining group of which Plaintiff was not a member. “Multiemployer bargaining is a very common practice throughout the United States and literally involves millions of employees and thousands of employers.” National Basketball Ass’n v. Williams, 45 F.3d 684, 688 (2d Cir. 1995). “It is a process by which employers band together to act as a single entity in bargaining with a common union or unions.” Id. However, multi-employer bargaining is strictly voluntary. See Charles D. Bonanno Linen Service, Inc. v. NLRB, 454 U.S. 404, 412 (1982). As a result, if an employer does not wish to participate in the multi-employer agreement, it need not do so.

Plaintiff did not participate in the multi-employer bargaining group that negotiated and executed the YRC/Teamsters labor agreement. As a result, Plaintiff is not a party to the agreement.

As explained above, the current multi-employer labor contract to which YRC is a party was negotiated in 2007 and is effective for the period April 1, 2008 through March 31, 2013. See supra at 3-4. Prior to the current labor contract, another multi-employer contract was in place for April 1, 2003 through March 31, 2008, and Plaintiff was a member of the multi-employer bargaining group at that time and was a party to the multi-employer labor agreement. Id. However, before the negotiations for the current labor agreement began, Plaintiff notified the Union and YRC in no uncertain terms that it was withdrawing from the multi-employer bargaining group. Id. at 4 (“ABF has unequivocally decided to negotiate its own [agreement] with the IBT and will separately give notice to the IBT that it has withdrawn from the TMI

8

multi-employer bargaining unit for purposes of prospective bargaining with the IBT.”). As a result, the current contract was negotiated on behalf of the remaining members of the multi-employer bargaining group. Id. Plaintiff had no role in the negotiations, and the employers’ bargaining representative did not represent Plaintiff in the negotiations. Id.⁵

The National Labor Relations Board mandates that “[e]ffective withdrawal from a multiemployer unit must meet three requirements.” Sheet Metal Workers’ Int’l Ass’n v. Herre Bros., Inc., 201 F.3d 231, 244 (3d Cir. 1999). The withdrawing employer must “(1) unequivocally withdraw[    ] from the association (2) in a timely fashion before negotiations for a new contract begin (3) by communicating the intent to withdraw to all parties.” Id. Here, Plaintiff’s withdrawal from the multi-employer bargaining group met all three criteria. Plaintiff’s letters to YRC and the Union unequivocally withdrew from the negotiations. See supra at 4. The withdrawal occurred prior to the beginning of the negotiations. Id. And Plaintiff sent notification of the withdrawal to all parties. Id. Thus, Plaintiff was not and is not a member of the multi-employer group that executed the current labor agreement.

After YRC and the other members of the multi-employer bargaining group negotiated and executed their current labor agreement, Plaintiff executed an agreement with the Union incorporating most of the terms of YRC’s agreement with the Union. This agreement was signed by Plaintiff and the Union only. (See Docket #1, Ex. 2) It does not alter the fact that Plaintiff is not a party to the YRC/Teamsters labor agreement.

9

Even in circumstances where individual employers have signed agreements that are exactly the same as multi-employer agreements—often referred to as “me too” agreements—the courts have been clear that those agreements are separate agreements from the underlying agreements whose terms they adopt. See, e.g., Contempo Design, Inc. v. Chicago and Northwest Illinois District Council of Carpenters, 226 F.3d 535, 540 (7th Cir. 2000) (en banc) (“Although Contempo is not a member of the Woodworkers Association, the collective bargaining agreement between the Union and the Woodworkers Association … provides the basis for Contempo’s own agreement with the Union. Specifically, Contempo agreed to adopt and be bound by the WAC CBA and by any successive agreements.”); Flynn v. Dick Corp., 384 F. Supp. 2d 189, 191 n.1 (D.D.C. 2005) (“Independent agreements such as the 1989 Agreement and the 2000 Agreement are oft-times referred to as ‘hard card’ or ‘me too’ agreements and bind the parties thereto to the provisions of a separate agreement—typically a collective bargaining agreement.”) (emphasis added); Longview Publishing Co. Inc. v. Metropolitan News Co., Inc.¸No. 87 Civ. 1103, 1990 WL 48104, at *1 (S.D.N.Y. 1990) (“Longview entered into an independent collective bargaining agreement with the Union in the form of a short “me too” letter agreement, which adopted the terms of the 1975-1978 Association contract.”) (emphasis added); Bituminous Coal Operators’ Ass’n v. Connors, 676 F. Supp. 1, 3 (D.D.C. 1987) (“None of the third-party defendants before the Court signed this particular Agreement. They were not at the negotiations and indicate they have no actual knowledge of what occurred. They signed identically worded, but independent, ‘me too’ collective bargaining agreements.”) (emphasis added).

Thus, an employer executing a “me too” agreement does not become a party to the underlying contract whose terms are incorporated. See, e.g., NLRB v. Oklahoma Fixture Co., 74

10

Fed. Appx. 31, 35 (10th Cir. 2003) (“OFC was not an NTCA member and it did not assign its bargaining rights to NTCA; thus, it was not a party to the 1975 Master Agreement.”); Service Employees Int’l Union v. City Cleaning Co., 982 F.2d 89, 90-91 (3d Cir. 1992) (“ARA had agreed to be bound by the terms and conditions of the BOLR Agreement for ARA employees working at Mellon, even though ARA was not an actual party to the BOLR contract. In union parlance, this contract was known as a ‘BOLR Me-too Agreement.’”) (emphasis added). Consequently, even if Plaintiff’s independent agreement with the Union were a “me too” agreement—which it is not—it does not alter that Plaintiff is not a party to the YRC/Teamsters labor agreement.

Nor do “me too” agreements or the like mean that the individual employers join the multi-employer bargaining group. Both the courts and the NLRB have firmly rejected such arguments. For example, in Schaetzel Trucking, Inc., 250 NLRB 321 (1980), the NLRB considered a multi-employer labor agreement similar to the YRC/Teamsters labor agreement at issue here. Despite language in the parties’ contract that seemed to suggest that “me too” signatories would become members of the multi-employer unit, the NLRB held that they did not. Specifically, the Board reasoned that “although the Employer signed the NMFA in 1970, it did not become a member of any employer group whose representatives were involved in the negotiation of that agreement or of successor agreements. It is well established that, in itself, ‘adopting of an area contract … is insufficient to make an employer part of a multiemployer unit.’” Id. at 323. The Board held additionally that “[t]his is so even when the contract contains a ‘one unit’ clause similar to the one involved here.” Id.

11

As a result, it is clear that Plaintiff’s execution of an agreement incorporating the YRC/Teamsters labor agreement does not mean that Plaintiff became a member of the multi-employer bargaining group to which YRC belonged. Accord NLRB v. Hayden Electric, Inc., 693 F.2d 1358, 1364 n.8 (11th Cir. 1982) (explaining that “the Board has specifically held on numerous occasions that an employer does not become a part of a multi-employer bargaining group where it merely adopts a collective bargaining agreement in the negotiation of which it did not actually participate.”); Painters And Allied Trades District Council, 299 NLRB 618, 620 (1990) (quoting and reaffirming Schaetzel Trucking).

Plaintiff’s own actions establish conclusively that it does not believe the arguments made in its complaint. As explained above, in early 2010, Plaintiff negotiated amendments to its labor agreement with the Union. See supra at 6. It conducted these negotiations itself—not through the multi-employer bargaining group. Id. And the resulting amendment to the labor contract applied to Plaintiff and its employees only, not to YRC, its employees, or any other companies or union members. Id.

Ultimately, Plaintiff’s employees rejected the proposed amendment to the labor contract. Id. But the fact that Plaintiff negotiated the amendment proves that Plaintiff is not a member of YRC’s multi-employer group or party to a labor agreement to which YRC is a party. Plaintiff’s argument to the contrary attempts to have it both ways: Plaintiff believes that it is entitled to negotiate new terms with its employees, but YRC is prohibited from doing so. There is no support for such a manifestly unfair result. As the Third Circuit has explained, “by revoking bargaining rights the employer must forgo the advantages of multiemployer bargaining.” Sheet Metal Workers’ Int’l Ass’n, 201 F.3d at 248. Having chosen to leave the multi-employer bargaining group, Plaintiff cannot now claim to have rights under it.

12

The effect of Plaintiff not being a party to the YRC/Teamsters labor agreement is that Plaintiff lacks standing to challenge the agreement or amendments to it. As a principle of general contract law, a stranger to a contract cannot bring suit to enforce it: “In general, a stranger to a contract has no rights under the contract unless the third party is an intended beneficiary of the contract, or there is a duty owed to the third party that is discharged by the contract.” ITT Hartford Life & Annuity Insurance Co. v. Amerishare Investors, Inc., 133 F.3d 664, 669 (8th Cir. 1998).

This principle applies to labor agreements as well. “To have standing to bring an action for breach of a collective bargaining agreement, a party must be either a member of the collective bargaining unit covered by the agreement or a third party beneficiary of that agreement.” Sepulveda v. Pacific Maritime Ass’n, 878 F.2d 1137, 1139 (9th Cir. 1989). See also Scanz v. New York Times, No. 97 Civ. 1042, 1997 WL 250447, at *5 (S.D.N.Y. 1997) (“A plaintiff must be either a member of the bargaining unit covered by a collective bargaining agreement or a third party beneficiary of the agreement in order to have standing to bring an action for breach of the agreement.”).

For example, in Souter v. International Union, 993 F.2d 595 (7th Cir. 1993), an employee and his wife brought suit against a union for breaching its duty of fair representation and against an employer for breach of a labor agreement. Id. at 596-97. The court heard, but denied, the employee’s claims on grounds not significant here. Id. Of importance to the instant lawsuit, however, the court also held that the employee’s wife lacked standing to sue: “We believe Hope

13

Souter has no standing to claim breach of the duty of fair representation, since she was not a member of the collective bargaining unit. We also believe she has no standing to sue Chrysler, since she was never an employee nor a third-party beneficiary of the collective bargaining agreement.” Id. at 597 n.1.

Thus, the courts have been clear that “only those parties with an interest in the collective bargaining agreement have standing to bring suit under § 301.” Greater Lansing Ambulatory Surgery Center Co. v. Blue Cross & Blue Shield, 952 F. Supp. 516, 520 (E.D. Mich. 1997). See also Carpenters Local Union No. 1849 v. Prett-Farnsworth, Inc., 690 F.2d 489, 502 (5th Cir. 1982) (“In conclusion, we must agree with the district court that the absence of a contractual relationship between AGC-New Orleans or AGC-At Large and the Unions requires dismissal of the section 301 claim against the two AGC defendants.”). A “court does not have subject matter jurisdiction over a non-signatory to a collective bargaining agreement, where no rights or duties of the non-signatory party are stated in the terms and conditions of the contract.” Service, Hospital, Nursing Home and Public Employees Union v. Commercial Property Services, Inc., 755 F.2d 499, 506 (6th Cir. 1985).

Plaintiff is not one of the parties to the contract that it asserts has been violated—that is, to the YRC/Teamsters labor agreement. Nor does Plaintiff have duties or rights under the contract or a legal interest in it. Nor was Plaintiff an intended third-party beneficiary of the agreement. As a result, Plaintiff lacks standing to sue Indeed, YRC can find no decision of any court holding that an entity with no interest whatsoever in a labor contract can sue to enforce its terms. Plaintiff asks this Court to be the first to do so. That request is not well-founded.

14

Conclusion

In sum, this Court should dismiss this action pursuant to Federal Rule of Civil Procedure 12(b)(1) because Plaintiff lacks standing to bring the claim.

15