YRC sues Teamsters Union for $137M

‘Egregious falsehoods and baseless insults’

Within a 57-page legal complaint, filed in U.S. District Court in Kansas, Yellow presents concern about financial failure if it cannot complete operating consolidation, which would require changing the current working rules which the Teamsters Union has been pushing back against.

Escalating Union Fight

Yellow is accusing the Teamsters General President Sean O'Brien as refusing to permit negotiations.  Sean O'Brien has responded with a 'grave' tweet.

The carrier has responded advising that the union president is deciding to "direct profanities at Yellow and its executives and even to gloat at Yellow’s impending demise."

“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 union said that YRC contacted them advising they will be out of money by August  “Yellow has been unable to effectively manage itself for a long time,” said Sean O’Brien, Teamsters general president, in a video to members. “Now, the company says it’ll be out of money by August. Do not forget — Teamsters have already given back everything they possibly could to keep Yellow afloat.”

YRC's Video: Fighting for 30,000 Employees

The key sticking point has been the driver requirement that they must work freight on the docks and potentially at locations other than home terminals. The Teamsters union are contending that the letter of agreement violates the current contract as it expands utility positions. 

A letter from John Murphy, Teamsters Freight Division Director, sent out on Monday advised that the change of operations in the West was different from the current proposal as the utility role in that region was contractually permitted and “all affected road drivers had their earnings protected and were allowed to continue to perform traditional road work.” John Murphy advised that yellow is seeking to "assign employees to any job, anywhere, at any time across operating companies."

Teamsters Blast Yellow Corp's Baseless Lawsuit

The Teamsters Union categorically denies the allegations made by Yellow Corporation in its lawsuit filed today. They released a press release today with the following statement:

“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 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 company continues to book net losses with a net margin of -0.10%, and is operating near breakeven. Currently the company is spending more than they are generating. Tonnage declined 16% y/y, and is down 1/3rd over the past two years.

The LTL carrier also advised that under the collective bargaining agreement, the union isn't permitted to "impede the One Yellow restructuring".  It is worth advising that the U.S. Treasury is the carrier's largest shareholder so they have sought White House intervention to encourage influencing the Teamsters to come to the bargaining table.