A federal court in Kansas has dismissed defunct Yellow Corp.’s $137 million breach-of-contract lawsuit against the Teamsters union and its negotiating arm. The court cited the company’s failure to exhaust the grievance process established under its collective bargaining agreement with the union as the reason for closing the case.
“The Court is guided by the language of the NMFA [National Master Freight Agreement]. Article 8, Section 1(a) is clear that ‘all’ factual grievances, or questions of interpretation, arising under the NMFA or supplemental agreements must first go through the grievance process of the applicable supplemental agreement. This provision applies to all parties,” a Monday order from the U.S. District Court for the District of Kansas stated.
In its suit, Yellow (OTC: YELLQ) alleged the Teamsters union had breached the collective bargaining agreement by not approving a second phase of operational changes, and by trying to tie any approval of the change of operations to wage increases.
The less-than-truckload carrier told the union last year that a second round of changes, which included the consolidation of its four LTL operating companies, closing redundant terminals and redefining work rules for some drivers, would be required for the company to survive. In the lawsuit, it claimed the union didn’t have the authority to reject the changes and that it “knowingly and intentionally triggered a death spiral for Yellow” by refusing to comply.
The union rejected Yellow’s proposed changes one year ago after agreeing to a similar plan in the Western portion of the carrier’s network in 2022. It said the employees it represented at the company had already given billions in wage, benefits and pension concessions in prior years and that it wouldn’t go along with another bailout.
Yellow ceased operations on July 30 and filed for bankruptcy a week later.
In the lawsuit against the Teamsters, Yellow said it wasn’t required to go through with the normal grievance process because its claims didn’t involve a work stoppage and because it was seeking monetary damages. It also described the grievance process as “futile,” even if fully exhausted, as it didn’t expect the Teamsters to participate and it didn’t think it could get a “final and binding decision.”
The court’s ruling said NMFA interpretations, disputes and grievances are to be directed to a regional joint area committee, which then can be immediately referred to the national grievance committee.
The court also denied a request from Yellow to amend its pleading should the court rule to dismiss the case. Yellow previously tried to have the case moved to the Delaware bankruptcy court overseeing its Chapter 11 liquidation.
The Teamsters union on Tuesday called the lawsuit “frivolous” and an abuse of the legal system.
“After years of corporate mismanagement, Yellow still never misses an opportunity to embarrass itself or bring further shame to what used to be one of America’s strongest freight carriers. As the Teamsters expected, the court saw right through Yellow’s PR stunt of a lawsuit,” stated Sean O’Brien, Teamsters general president.
The bankruptcy court is soon expected to rule on a venue for hearing billions of dollars in withdrawal liability claims from pension funds. The pension funds have asked that the dispute be settled through arbitration while Yellow is hoping to keep the matter before the bankruptcy court. A Monday filing from Yellow asked the court to disallow $257 million of such claims from the Western Conference of Teamsters. It said the claims are invalid and that it had never been notified of the liability since withdrawing from the fund in 2009.
Representatives from Yellow had not responded to a request for comment by the time of this publication.
peg
What about the back pay owed to the former employees you crapped on. Vacation days at minimum, 60 days from the warn violation (tho you probably found some loophole there). not holding breath to get the pension either at this point.
John Kopp
1: Yellow you offered the wage increase first, the union took you up on it. Stop lying. 2: If you want to blame the union O’Brian is not the one. That credit goes to Hoffa, Hall, and Johnson. They dropped to their knees every time Yellow came calling. Sacrificing the rank and file for union dues. 3: If you left money on the table, OH SILLY YOU. That company was going down in 2010.
riley
please lets hear no more abut this company called Yellow Freight, a company that was totally missed manage by upper management that ripped off union employees and lower management. All they have to do is go away quietly and pay all the union employee and lower management employee the cash money (i.e. vacation time, sick time, etc) due them.
DOCKBOSS
As a former New Penn/Yellow dockworker for 23 years it’s a disgrace what happened. I put blame on the Unions and Upper management. It is what it is not the first and not the the last. I just want what I’m owed God bless all my brothers and sisters who’ve lost their Jobs.
Michael Rosenberg
That’s because teamsters have very deep pockets
Trucker Chuck
Both Yellow Management and Teamsters execs are to blame for the death of this company last year. O’Brien and Hawkins are both bullies trying to outwit each other and in the end 33,000 good people lost their jobs and livelihood.
Today Hawkins is living off his golden parachute and O’Brien still tours the nation taking weekly dues from union members. There is a special place in hell waiting for both of them.
Freight Zippy
Hopefully we never hear about this company or this union again.
After the teamsters put them out of business both organizations continue to relive the misery of their existence.
The freight world is much better off with out either of these two
ed blaine
please, drive a stake thru yellow’s heart, it’s done. worse than a crackhead wanting another fix. the party is over. when are the top dogs at yellow going to take blame for absolute mismanagement, the signs were out 30 years ago, too big to fail, demand operation changes, and concessions, still went belly up.