NASHVILLE — Yellow Corp. has filed a lawsuit in the U.S. District Court for the District of Kansas against the International Brotherhood of Teamsters (IBT).
The company made the announcement Tuesday, June 27, in a news release.
The complaint alleges that the Teamsters “breached their binding union contract with Yellow, causing more than $137 million in damages by unjustifiably blocking, for over eight months, Yellow’s restructuring plan to modernize its business, which is necessary to compete against non-union carriers that dominate the LTL business today.”
Yellow’s complaint further states that “These modernization efforts, known as One Yellow, are essential to the company’s survival.”
In a news release, the Teamsters Union said it “categorically denies the baseless allegations made by Yellow Corporation in its frivolous lawsuit filed today.”
“Yellow Corp.’s claims of breach of contract by the Teamsters are unfounded and without merit,” said Teamsters General President Sean M. O’Brien. “After decades of gross mismanagement, Yellow blew through a $700 million bailout from the federal government, and now it wants workers to foot the bill. For a company that loves to cry poor, Yellow’s executives seem to have no problem paying a team of high-priced lawyers to wage a public relations battle—all in a failed attempt to mask their incompetence.”
The Teamsters say they have “diligently adhered to the terms of the collective bargaining agreement (CBA) signed with Yellow Corp., fully honoring its contractual commitments and obligations,” the news release states.
“The company is misleading our members and the public. We have a contract with Yellow that expires March 31, 2024, and Teamsters are living up to it. Yellow’s management knows they’ve failed this company and their workforce because they can no longer live up to the terms they once agreed to. This lawsuit is a desperate, last-ditch attempt to save face,” said Teamsters General Secretary-Treasurer Fred Zuckerman.
The Teamsters went on to say in their news release that the lawsuit by Yellow “is a blatant attempt to undermine the rights of workers and discredit the Teamsters. The Teamsters are fully prepared to defend the union’s position vigorously and utilize all available legal resources to challenge the meritless accusations put forth by Yellow Corp.”
Yellow officials say that “without these crucial reforms, which are standard practice in the industry today, Yellow likely will not survive, 30,000 jobs will be lost, including 22,000 union jobs, and its shareholders, including the federal government, which owns 30.1% of Yellow stock, will be severely damaged.”
In a statement, Yellow Corp.’s management team said the union’s leadership has left them no choice but to sue.
“For many months, we have made good faith efforts to meet with the IBT to propose a path forward that works for all parties, but they refuse even to meet, let alone engage in honest talks,” according to the statement. “We have communicated with all stakeholders in Washington, D.C., including the Biden administration, to apprise it of the imminent loss of tens of thousands of jobs, the significant anti-competitive effects on the American economy and the devastating impact to the supply chain, and to seek their assistance in persuading the IBT to negotiate a mutually acceptable agreement. We are fighting for the livelihood of our 30,000 employees who are good hard-working people. We will do all we can to save these American jobs and to protect our shareholders, including the American taxpayer.”
The complaint also alleges that O’Brien “orchestrated these breaches and has prevented Yellow from meeting with IBT leadership. For several years, the IBT had endorsed the company’s modernization effort and, in fact, approved the first of the effort’s three phases before the IBT reversed itself taking, in Mr. O’Brien’s words, a ‘militant approach’ to blocking Yellow’s modernization.”
Yellow executives say completion of One Yellow in 2023 “is critical to Yellow’s ability to survive, particularly given that Yellow faces, among other things, the imminent need to refinance $1.3 billion in debt — a $567.4 million term loan maturing on June 30, 2024, and a $729.4 million U.S. Treasury loan maturing on September 30, 2024. Nonetheless, as alleged, the Union has blocked Yellow’s completion of One Yellow, triggering grave uncertainty for employees, investors and customers, and has knowingly intended to cause Yellow’s economic ruin.”
Yellow executives claim O’Brien “has taken up the role of public agitator for the company’s demise, recently tweeting an image of a headstone in a cemetery with ‘Yellow’ on it.”
Yellow’s statement further said that O’Brien “has continued to hide behind numerous false, unconstructive, and irresponsible social media posts maligning the company, while refusing to discuss a path forward with the company itself.”
Yellow officials contend they wouldn’t have had to file suit if Teamsters officials had agreed to “negotiate in good faith.”
“Yellow must now take immediate steps to try to save itself,” according to the Yellow statement. “Yellow is entitled to $137.3 million (and counting) for the injury the Union has caused Yellow, and continues to cause Yellow, and in the event of its demise, at least $1.5 billion for the loss in enterprise value Yellow is sustaining as a result of the union’s breaches.”
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