Yellow Corp files lawsuit against International Brotherhood of Teamsters

Yellow Corporation has filed a complaint in the U.S. District Court for the District of Kansas against the International Brotherhood of Teamsters and certain of its affiliates. The company said, “The complaint alleges that the defendants 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. 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 complaint also alleges that Sean O’Brien, IBT General President, 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.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. Moreover, Sean 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. He 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. The situation might have been avoided if the Union had participated in meetings months ago or otherwise agreed to sit down and negotiate in good faith. Yellow must now take immediate steps to try to save itself. Yellow is entitled to $137.3 million 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.”