Yellow is North America’s third-largest LTL carrier, trailing only FedEx Freight and Old Dominion Freight Line. (Yellow Corp.)
Yellow Corp. plans to appeal a July 21 decision by U.S. District Court Senior Judge Julie Robinson that denied the LTL carrier’s request for an injunction to prevent the International Brotherhood of Teamsters from striking against the company.
The Teamsters have said they would initiate a strike as early as July 24 after Yellow failed to make benefits contributions payments on July 17.
Yellow said July 21 it regrets Judge Robinson’s decision.
“The court, recognizing a strike would likely kill the company, resulting in the loss of 30,000 jobs, cautioned the Union — that while it won today’s battle, it could very well lose the war,” it said in a statement.
Yellow officials have been in the midst of a yearlong corporate reorganization and consolidation of some of their terminals and the union contends those actions violate the parties’ collective bargaining agreement.
Yellow’s leadership has said previously its reforms were crucial to the company’s survival, and in its court filing the company said if the judge denied its request it would have to file for bankruptcy. But after the July 24 ruling the company said only, “The company will continue to pursue its breach of contract case where it seeks to recover more than $1.5 billion in lost enterprise value caused by the International Brotherhood of Teamsters.”
The company also previously warned its shareholders and the federal government would be impacted by a business interruption. The government loaned the carrier nearly $730 million during the COVID-19 pandemic and it currently owns more than 30% of the company’s stock.
Much of the loan has been spent as the company used the money to replace its outdated fleet of trucks and attempt to improve its overall operation.
Earlier in July Yellow sued IBT for $137 million, which it said was the cost of the union’s efforts to block the plan.
“For many months, we have made good-faith efforts to meet with the IBT to propose a path forward that works for all parties, but they refuse even to meet, let alone engage in honest talks,” Yellow said. “We have communicated with all stakeholders in Washington, D.C., including 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 to the supply chain, and to seek their assistance in persuading the IBT to negotiate a mutually acceptable agreement. We are fighting for the livelihood of our 30,000 employees who are good hard-working people. We will do all we can to save these American jobs and to protect our shareholders, including the American taxpayer.”
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On July 17 the Central States Pension Fund’s Board of Trustees voted to cease pension accruals for Yellow employees and suspend health care benefits for the parent company and two additional Yellow companies, Holland and YRC Freight, saying Yellow had failed to meet its financial obligations.
The Teamsters said if those pension and health care payments were not resumed it would begin a strike as early as July 24.
The union denied what it said were baseless allegations made by Yellow in its lawsuit.
“Yellow Corp.’s claims of breach of contract by the Teamsters are unfounded and without merit,” Teamsters President Sean O’Brien said. “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.”
Miller
Michigan State University business professor Jason Miller told Transport Topics that as Yellow’s legal problems have been building recently, shippers and trucking companies have been seeking out their business and the judge’s ruling is devastating to the company.
“It does not bode well for Yellow and the moment,” he said. “We’ve just been hearing too much about shippers pulling freight from them and if there is going to be a strike we are going to see shippers not tendering next week, and it starts to really raise the question of how long the company can survive, assuming they have already lost a substantial amount of business the last couple of weeks.”
Miller says if the Teamsters strike against Yellow, there is additional capacity in the freight sector.
“There is volume elsewhere and right now it is an environment where there is some excess capacity. Old Dominion’s tonnage has been down, they can take some. FedEx Freight has been down quite a bit and they can take a decent amount. There is capacity out there for shippers to move to and this is not good for Yellow.”
Company officials claimed the union had “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” and that they would not have filed the lawsuit if the Teamsters had agreed to “negotiate in good faith.”
Nashville, Tenn.-based Yellow Corp. ranks No. 13 on the Transport Topics Top 100 list of the largest for-hire carriers in North America and No. 3 on the LTL list.
