Yellow Corp.
Yellow Trucks

Union calls off strike against Yellow after benefits concession

July 24, 2023
The mega carrier’s Teamsters were set to walk out today after a judge on July 21 blocked Yellow’s request for an injunction to stop a strike, but the primary roadblock was cleared after their health and pension fund agreed to extend benefits.

A strike by about 22,000 Teamsters at embattled No. 6 for-hire FleetOwner 500 carrier Yellow Corp. was averted at least temporarily this week after the workers' health care and pension fund, Central States, agreed on July 23 to extend health care benefits covering two Yellow operating companies, YRC Freight and Holland.

The union had threatened a work stoppage as soon as today, July 24, since Overland Park, Kansas-based Yellow had failed to make July 15 payments of $50 million and had said it would not fulfill an Aug. 15 installment under their current labor deal. The company had then sought but failed to win a July 21 injunction to stop the Teamsters from striking. A work stoppage could tip the less-than-truckload carrier into insolvency and bankruptcy, company officials have said.

"The intense discussions between Teamsters leadership and Central States successfully convinced fund trustees to reverse their previous decision that health care benefits would end on July 23 if Yellow remained delinquent," read a July 23 union statement. The company had also missed its pension contributions. The agreement "gives Yellow 30 days to pay its bills with the understanding the company will do so within the next two weeks."

See also: UPS, union agree to resume contract talks

And the parties look to be headed for negotiations as Teamsters General President Sean M. O'Brien ordered the union's negotiating committee to meet with Yellow representatives late on July 23. Meetings will take place in Washington, D.C., to review the state of the company and its current contract with the union.

"Our members at YRC Freight and Holland cannot work without health care, and the Teamsters worked tirelessly to ensure an immediate strike at Yellow could be averted," O'Brien said in a union statement. "These discussions were not easy, but Central States has made meaningful movement under pressure from the union. We are seeking a real resolution, but let this solution today serve as a profound reminder that our members can only endure so many sacrifices."

The company did not issue a statement after Central States agreed to extend the Teamsters benefit payments, but in a statement July 19 claimed a strike would not have been lawful since Yellow said a work stoppage would have violated the parties' collective bargaining agreement. "In June, Yellow wrote to the funds, requesting a short-term deferral of its obligations to pay contributions for two months, July and August, with interest. This request is not without precedent. Regrettably, the Board of Trustees of Central States refused Yellow's request, despite the funds' healthy reserves."

In last week's statement, Yellow blamed the union for resisting negotiations on the company's "long-planned and necessary modernization effort," One Yellow," that would enable Yellow … to streamline and strengthen its operations to compete against non-union carriers."

Third restructuring in 15 years—and strife that will continue

Late last month, in a lawsuit filed in U.S. District Court in Kansas, Yellow accused union leaders of breaching their contract with the LTL, sabotaging the One Yellow business plan, and putting the company at risk of needing to liquidate its assets.

Yellow's third restructuring in 15 years would regionalize and streamline the company's operations and integrate its four legacy brands. Per a collective bargaining agreement, Yellow claims Teamsters leaders—the company specifically calls out O'Brien's self-professed "militant" approach—must cooperate on One Yellow efforts (on employee seniority questions, among other things), but Yellow says the union has refused to consistently work with the company over the past eight months after engaging on the first phase of the restructuring.

See also: More bad blood between Yellow and its union as Teamsters vow to strike

The Yellow lawsuit states that labor's resistance to moving ahead with One Yellow has come mainly from a broad demand to lift wages under the parties' contract, which runs until March 2024. Yellow leaders in May offered to raise wage and mileage rates with the condition that the company needed to restructure or refinance existing debt deals or secure new financing before it could begin paying those higher rates. Union leaders rejected the offer and told members the plan was "a non-starter."

The company's financial troubles are well-documented. Three years ago, then-President Donald Trump bailed out the company with a $700 million pandemic relief loan. In exchange, the federal government took a 30% stake in Yellow. The company has not repaid the government loan, according to Reuters, as the government financing is part of about $1.2 billion in debt that Yellow must refinance before it comes due in 2024.

In its last June lawsuit, the LTL asked a jury to award it $137 million in damages that executives say they've already incurred (as lost adjusted EBITDA) due to the delay of One Yellow caused by the union. The company also asks for "at least $1.5 billion for the loss in enterprise value that Yellow is sustaining and will sustain as a result of the Union's breaches." Yellow CEO Darren Hawkins, whom the Teamsters have called on to resign, has said the company would be forced to sell its assets and shut down if One Yellow isn't completed.

Senior Editor Geert De Lombaerde contributed portions of this story.

About the Author

Scott Achelpohl | Managing Editor

I'm back to the trucking and transportation track of my career after some time away freelancing and working to cover the branches of the U.S. military, specifically the U.S. Navy, U.S. Marine Corps, and the U.S. Coast Guard. I'm a graduate of the University of Kansas and the William Allen White School of Journalism there with several years of experience inside and outside business-to-business journalism. I'm a wordsmith by nature, and I edit FleetOwner magazine and our website as well as report and write all kinds of news that affects trucking and transportation.

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