Less-than-truckload carrier Yellow Corp. has asked the U.S. District Court for the District of Kansas to enter a temporary restraining order and preliminary injunction barring the Teamsters union from a work stoppage.
A hearing is scheduled for Friday in Kansas City at 1:30 p.m. local time.
The Thursday request follows a strike notice issued by the Teamsters earlier in the week. The union is threatening to go on strike as soon as Monday in response to Yellow’s missed contribution payments to Central States Funds. The carrier previously asked Central States to defer payments due July 15 and Aug. 15, but the request was denied.
“Absent injunctive relief, Plaintiffs will suffer immediate, substantial, and irreparable harm from Defendants’ unlawful work stoppage, including being forced into a Chapter 7 liquidation bankruptcy proceeding,” the filing read.
The company is calling on the court to direct the union to immediately engage in the grievance procedures outlined in the collective bargaining agreement as talks have broken down between the parties over the carrier’s second phase of a restructuring called “One Yellow.”
That change of operations seeks to make changes similar to a first phase implemented in the western part of Yellow’s (NASDAQ: YELL) network last year. The plan calls for the consolidation of terminals, more flexibility around work rules and increased usage of third-party transportation, all of which Yellow maintains are required for its survival.
As the two parties have been unable to come to terms over the last several months, the carrier’s liquidity position has eroded quickly.
A recent filing with the Securities and Exchange Commission showed the company had in excess of $100 million in cash at the end of June. However, in recent weeks shippers have been diverting freight from Yellow and brokers and intermediaries have removed the carrier as a capacity option from their platforms, moves made to keep shipments from getting stuck in Yellow’s network if the carrier were to shut down.
Health, welfare and pension payments to Central States for the two-month period equal approximately $50 million, of which Yellow is delinquent on presumably half. Without payment, approximately 10,000 Teamsters at YRC Freight and Holland covered under the plan will be without health insurance on Sunday. The company’s participation in the pension plan will also be terminated on that day.
However, the delinquencies will likely extend beyond that.
A series of letters from July 12 to 13 between Yellow CEO Darren Hawkins and Teamsters General President Sean O’Brien show the company would also miss payments to its second and third largest funds as well, affecting more employees and potentially expanding the number of workers that would strike.
“Indeed, the urgency is so acute that, although the Company has made its required contributions to nearly all benefit funds coming due this week, our current cash position will prevent the Company from making contributions to the three largest health, welfare and pension funds in which Yellow participates — Central States, Western Conference and Central Pennsylvania,” Hawkins told O’Brien in a July 13 letter.
A Wednesday letter to the rank and file of the Denver local union representing employees at YRC Freight and Reddaway said if the company fails to pay it will be without coverage after July 31 and that it would also prepare for a strike.
The written exchange between Hawkins and O’Brien also referenced what would equate to an $11 per hour increase in wages and benefits over a five-year contract term, contingent on full implementation of the One Yellow initiatives.
“I fully realize that making such a significant economic proposal before we even sit down at the bargaining table is, to say the least, unorthodox. The Company’s acute liquidity crisis and its absolute need to make progress at the bargaining table, however, require us to approach these negotiations in a fundamentally different way,” Hawkins stated in the offer.
O’Brien asked for precise terms and said Yellow would need to drop its breach of contract lawsuit against the Teamsters. Yellow countered with $2.19 per hour in the first year and said it would drop legal proceedings “upon the successful conclusion of our negotiation.” The company also disclosed that it wouldn’t be making upcoming payments to the aforementioned funds at which point O’Brien deemed the offer a “hypothetical increase” and “conditioned on future events,” likely referring to a previous letter of agreement offered by Yellow.
That letter of agreement offered a 60 cent per hour pay hike, in addition to pulling forward the contractual 40 cent hike that starts Oct. 1. However, the company said it didn’t have the ability to fund the increase and its lenders would need to sign off on it at a later date.
O’Brien also said in his letter that Yellow’s deferral of contributions would permit local union members impacted by the missed payments to “avail themselves of the rights Local Unions have under the existing collective bargaining agreement under such circumstances,” with the inference being a work stoppage. He also said the wage increase needed to be implemented immediately to proceed.
“Simply put, institute the $2.19 per hour increase on July 1, 2023, and then we will discuss potential next steps.”
The back-and-forth appears to have ended there.
“There is no adequate remedy that can compensate Plaintiffs for the Union’s failure to follow the NMFA grievance procedures and Plaintiffs’ resulting loss of customers and termination of operations,” Yellow’s court filing read.
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Dennis m.Safrit Sr
Again,they name everyone but the employees that have gave so much since the day yellow acquired Holland New Penn and Reddaway.how many billions have we gave and the sacrifices we make week after week? But as usual it’s all about these cry babies and how we are stealing from them because they signed the contract and screwed us even moreso in 2019. But least important thing is that have mismanage the whole thing for over 40 years again do your research!!!! I’ll preach this everyday do the audit and this will reveal how they don’t have a clue. For you folks that think it’s only about the money and that we are ungrateful you have never worked here!! You probably never have worked for a LTL company much less run line haul. Come on out here and run with me for only a week you’ll run home crying to your wife and your mom on how we abused you. Lol. It’s tough !! It’s not for the faint of heart you have to have very thick skin, patience, dedication. Again your in all kinds of everything everyday. So until you have walked and drove in our shoes chill out you have no room to say anything. There’s just to much that’s wrong here at yellow under the people that’s running it in the ground to say . Pull up a chair. We all want what’s best for the company but Darren Hawkins and the 30 or more under him and the 135 vice president have got to go for anyone to start making any changes here . Bottom line, bottom line
Mike L.
Another business the Teamsters have bullied out of existence. When they close the doors the drivers could learn ” would you like fries with that” yet the union bosses will be fine.
ExUnion guy
Two problems – Yellow clearly isn’t a financially viable company anymore and hasn’t been for years. To many poor decisions along the way eventually catch up. Yellow doesn’t diversify nor have they ever planned for the future and changes of the logistics profile. IBT – I agree with the premise behind unions, better conditions and pay for employees. However, pay equalization results in two issues. Regardless of how hard an employee works they are paid the same as the lazy employee. You’re now hiring a generation that has NO WORK ETHIC! The IBT used to do a good job of policing themselves, now they fight harder for employees that have no business keeping their jobs and are in return rapidly losing credibility within the IBT. The IBT can think and say what they want, but any given day every union company is one buy out away from cutting the IBT cord indefinitely. You all really need to take a look at just how solvent your pension is. You’re going to see this very thing among another famed IBT Carrier very soon. The IBT’s span of control is gradually diminishing. The political party (that used to represent unions) has no issues stepping in and medaling in the negotiation process, look no further than the railroad ordeal. The union got screwed and there is absolutely no recourse. No one fears unions anymore, there’s nothing to fear when you can sell out from under them.
Carol mealer
Yellow is making good offers and this county will be hurt completely if 30000 employees lose jobs and benefits this is just crazy my son works for them and most people don’t want this to happen and want this to be done. Unions need to be gone they are only good for bad employees. Go to work do your job get a paycheck so simple
Michael tucker
The ass hole hockins needs to quit I worked at
yellow for 20 years they were in grate shape
Mark Niederle
Dont worry they will get a billon dollars from the goverment again
StopBeingCryBabbies
There was a time and place for the Union in this industry, like 40 years ago. I work for a non-union carrier and have better benies and pay. It was to make the industry and the employees have safer working conditions. I ask you this. Look at Yellow, ABF, UPS/T-Force’s equipment compared to FedEx, OD, and other non-union carriers. What are you dues paying for, a retirement plan that you’ll never see??? Where else can you make $150,000 a year with no high school diploma, give me a break. I graduated with honors and don’t make that much.
Craig
The court needs to stay out of it. Yellow is breaking the contract that yellow agreed to. Yellow is screwing the employees just like they did back in 2010 and they never made good on that. It’s all bull, they are done.