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Yellow sues Teamsters for $137 million, says union could drive them out of business and cause 30K workers to lose jobs

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On Tuesday, Yellow Corporation announced a lawsuit has been filed against the International Brotherhood of Teamsters (IBT), alleging that IBT is blocking the company’s attempts to modernize in order to stay in business.

The lawsuit filed in the U.S. District Court for the District of Kansas accuses the Teamsters of breaching their contracts and causing more than $137 million in damages by standing in the way of of Yellow’s attempts to modernize and restructure their business which they say “is necessary to compete against non-union carriers that dominate the LTL business today.”

From Yellow:

These modernization efforts, known as One Yellow, are essential to the Company’s survival. 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. Yellow remains a critical part of the domestic supply chain with hundreds of thousands of customers — large and small — relying on the Company to deliver freight coast-to-coast. Driving Yellow out of business will badly damage the supply chain, lessen competition and raise the price of shipped goods in the LTL market and feed inflation.

The lawsuit specifically accuses IBT General President Sean O’Brien of orchestrating contract breaches and preventing meetings between IBT and Yellow.

The IBT called the lawsuit “baseless” and accused the company of mismanaging a large pandemic relief payment made to Yellow in 2020.

“Yellow Corp.’s claims of breach of contract by the Teamsters are unfounded and without merit,” said 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 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.

In the video below Yellow CEO Darren Hawkins announces the lawsuit against the IBT.

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