Court reinstates Yellow’s $1.5 billion lawsuit accusing Teamsters of driving trucking company into bankruptcy

A court sided with defunct trucking company Yellow Corporation in the company’s legal battle against the International Brotherhood of Teamsters.

Lawsuit Dismissed In Error: Court

On November 5, 2025, the U.S. Court of Appeals for the Tenth Circuit reinstated a suit filed by Yellow and co-plantiffs YRC Freight, USF Holland, LLC, New Penn Motor Express, LLC, and USF Reddaway, Inc. against the Teamsters.

The court unanimously ruled that the U.S. District Court for the District of Kansas dismissed the lawsuit in error in 2024 and should have instead granted Yellow’s motion for leave to amend its complaint to include new allegations.

Yellow filed for bankruptcy protection and shuttered operations in August 2023, resulting in the loss of 30,000 union and non-union jobs.

Yellow was already under financial distress when it sued the Teamsters in June 2023 leading up to the bankruptcy filing, accusing the group of violating a collective bargaining agreement.

Yellow: Teamsters Refused Restructuring And Destroyed Business

Yellow blamed the company closure on the refusal of the Teamsters to agree to a restructuring plan that would have combined YRC Freight, Reddaway, Holland, and New Penn into a single carrier providing both regional and long haul services. The plan would have required the closing of some facilities and would have converted some drivers into “utility worker” positions that would require local driving and dock work.

According to legal firm Kasowitz LLP, Yellow’s revived suit alleges “that the Teamsters, directed by then newly elected President Sean O’Brien, intentionally and unlawfully obstructed Yellow’s critical change-of-operations initiative in violation of the collective bargaining agreement, with the aim of stonewalling Yellow’s restructuring and destroying its business. This conduct, according to Yellow, drove the company into bankruptcy, destroyed 30,000 jobs, and caused the collapse of a century-old American enterprise.”

Yellow said that the Teamsters caused $137 million in damages by refusing to accept the restructuring plan for several months.

“Yellow alleges that O’Brien was willing to allow the company to fail as a show of strength ahead of the Teamsters’ negotiations with other, larger shipping companies,” court documents state.

The Teamsters responded to the allegations by stating that Yellow “is now merely using them as a scapegoat for the company’s inevitable demise.”

Kasowitz LLP said that Yellow will “move forward on remand on its more than $1.5 billion claim against the Teamsters.”

“We are pleased that the United States Tenth Circuit Court of Appeals has issued its decision reversing the District Court and reinstating Yellow’s claims so that the Teamsters and their senior management can be held to account for their role in causing Yellow’s demise and the destruction of billions of dollars in shareholder value,” said Marc E. Kasowitz, counsel for Yellow.