Dive Brief:
- Yellow Corp. sued the International Brotherhood of Teamsters Tuesday, alleging union leaders breached the company’s labor contract and cost the LTL carrier more than $137 million in damages by “unjustifiably blocking” its One Yellow network overhaul.
- The 57-page legal complaint, filed in U.S. District Court in Kansas, emphasized Yellow’s concern about financial failure if it cannot complete the consolidation of its operating companies and change working rules, which the union has spent the past 8 months opposing.
- Yellow alleged in the lawsuit it had been "pushed to the brink" by the union’s refusal to negotiate the second phase of the overhaul, and "must now take immediate steps to try and save itself."
Dive Insight:
The lawsuit is the latest silo in an escalating fight between the union and the carrier over the future of the company.
“Today, our 30,000 jobs, mostly union jobs, are in serious jeopardy because the leadership at the International Brotherhood of Teamsters refuses to come to the table to discuss the future of our employees,” Yellow CEO Darren Hawkins said in a video released with the lawsuit. “We are now fighting for the livelihood of our 30,000 employees. ... We simply cannot let these jobs and this company go without taking a stand.”
Yellow alleged Teamsters General President Sean O’Brien has refused to permit negotiations, and the lawsuit included a screenshot of a tweet by O’Brien, superimposing the company’s logo on a headstone, on Saturday.
If “Do Nothing Darren” continues he will single handily destroy a once honorable company … RESIGN NOW… Our members are done making bad investments….. pic.twitter.com/8db5HACLAy
— Sean O'Brien (@TeamsterSOB) June 24, 2023
Instead of allowing negotiations, the union president has chosen to “direct profanities at Yellow and its executives and even to gloat at Yellow’s impending demise,” the carrier claimed.
“In fact, for his own inexplicable reasons, political or otherwise — reasons that could not possibly be in the interests of Union members, let alone the country — Mr. O’Brien has made clear that he wants to bring about Yellow’s demise,” the company said in the lawsuit.
In a statement in response, the Teamsters called the lawsuit “frivolous,” saying it contained “baseless allegations” and represented a “blatant attempt” to undermine workers and discredit the union.
“Yellow Corp.'s claims of breach of contract by the Teamsters are unfounded and without merit,” O’Brien said in the statement. “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 union leader added.
Completing One Yellow this year is “critical to Yellow’s viability,” the company said in the lawsuit.
The company noted its need to refinance its $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.
The complaint pointed out that the Teamsters approved Phase 1 of One Yellow, which was implemented in the western region last September.
“The Union’s recent refusal to comply with those contractual obligations marks a reversal from its original conduct in connection with Phase 1 of One Yellow,” the lawsuit said, adding “that implementation has resulted in a more efficient and successful operation in Yellow’s western network.”
The LTL provider further noted that under the collective bargaining agreement, the union isn’t permitted to “impede the One Yellow restructuring” but is obligated to cooperate “to resolve employee seniority issues that may arise.”
Yellow also revealed that it had contacted 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 on the country’s supply chains Yellow’s demise will cause.”
The carrier said it sought White House intervention to persuade the Teamsters to come to the table. It noted that the U.S. Treasury is the carrier’s largest shareholder.
But that effort was “all to no avail,” the complaint said.
In the video, Hawkins said six other union trucking companies have gone belly-up in the past few decades, in large part because they couldn’t compete against non-union carriers, and only three major unionized carriers remain in LTL.
“We do not take this action lightly,” the Yellow CEO said, “but their leadership has left us with no choice.”
