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Thursday, September 28, 2023

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Major Trucking Union Being Sued For Millions

Yellow Corp. has filed suit against the union group, International Brotherhood of Teamsters and certain affiliates in Kansas court.

On June 27, one of the largest for-hire trucking carriers said in a statement that the union group caused more than $137 million in damages.

U.S. District Court for the District of Kansas alleges breach of a binding contract, fighting that the union caused the damages by “unjustifiably blocking” Yellow’s plan to modernize its operations for more than eight months. Yellow argues the restructuring plan “is necessary to compete against nonunion carriers that dominate the LTL business today.”

Yellow Corp. firmly believes that reorganization is vital to the company’s survival. In the same statement, the trucking company argues that failure to implement the plan would result in 30,000 job losses, including 22,000 union positions. 

According to the corporation, the decision to pursue legal action against the union was a carefully thought about idea. “The union’s leadership has left us with no choice.” 

Yellow said the IBT union would not meet with them, despite efforts to do so on Overland Park, Kansas-based Yellow’s part.

The Teamster gave a response to the suit on June 27, stating that the union “categorically denies the baseless allegations” in what the union referred to as a “frivolous lawsuit.” The breach of contract allegations are “unfounded and without merit,” said Teamsters General President Sean O’Brien.

According to Yellow, O’Brian fabricated the breach in contract and prevented the meeting between the two organizations, arguing that the union endorsed the company’s modernization efforts “for several years” before reversing its stance.

Teamster also argues that it has abided by the collective bargaining agreement with Yellow that runs through March 2024. Teamster said they intend to defend themselves against these claims against them.

After announcing the lawsuit against the union, Yellow’s share prices took a dramatic hit, reaching an intraday low of 91 cents. The stock closed at 99 cents, down 21.75% on the day compared with the previous day’s $1.27 close.

Since February, Yellow’s stock has gone down nearly 75% of its total value when compared to 2023.

In May, Yellow executives were confident in their ability to strike up a deal with Teamster. The company posted a loss of $54.6 million in the first quarter, or $1.06 a share, compared with a loss of $27.5 million or 54 cents in the same period a year ago.

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