The U.S. Court of Appeals for the Tenth Circuit on Wednesday reinstated Yellow’s $1.5 billion lawsuit against the International Brotherhood of Teamsters (IBT) more than two years after the company's formal demise.
The Tenth Circuit panel reversed the U.S. District Court for the District of Kansas’ March 2024 dismissal, ruling that the lower court erred in denying Yellow’s motion for leave to amend its complaint.
"We are pleased that the United States Tenth Circuit Court of Appeals has issued its decision reversing the District Court and reinstating Yellow’s claims so that the Teamsters and their senior management can be held to account for their role in causing Yellow’s demise and the destruction of billions of dollars in shareholder value," said Marc E. Kasowitz, counsel for Yellow.
The lawsuit, Yellow Corporation et al., v. International Brotherhood of Teamsters et al., was filed in June. Yellow filed for bankruptcy two months later.
The third largest LTL carrier in the country at the time, Yellow alleged that the labor union breached a binding contract with Yellow and caused more than $137 million in damages by "unjustifiably blocking, for over eight months, Yellow’s restructuring plan to modernize its business, which is necessary to compete against non-union carriers that dominate the LTL business today."
Yellow's Chapter 11 liquidation wiped out more than $1.5 billion in enterprise value and the now-defunct carrier is seeking to recoup tens of millions of dollars in costs it incurred administering the liquidation, as well as the billions in withdrawal pension liabilities that were triggered.
In a statement provided to CCJ Wednesday afternoon, the IBT said it previously "defeated Yellow’s baseless complaint and look forward to defeating their baseless Amended Complaint."
In its 30-page ruling, the court this week held that Yellow’s “proposed amended complaint adequately pleaded that the Teamsters had repudiated the collective bargaining agreement’s grievance process,” which excused Yellow from any requirement that Yellow exhaust such procedures, and further held that Yellow’s “factual allegations supported [its] overarching theory that the Teamsters’ ultimate plan was to ‘stall the Phase 2 CHOPS, blindly decline all proposals by Yellow, and foment an illegal strike.’”
When the case was filed, Yellow was in dire financial straits, having taken on $1.3 billion in debt, including a nearly $730 million loan from the U.S. Treasury.
At the time, Yellow was in the second phase of its One Yellow strategy to improve efficiency, speed, choice and value for its customers. Phases 2 and 3 of One Yellow, which included aligning operations in the Northeast, Midwest, Southeast and Central regions, were set to take place in 2023. Phase 1, integrating the linehaul networks of YRC Freight and Reddaway in the Western region (about 20% of its network), was completed in 2022 with union approval and under the collective bargaining agreement, Yellow charged that the union was not permitted to impede its restructuring.
In its amended complaint, Yellow alleged that the Teamsters, directed by then newly elected President Sean O’Brien, "intentionally and unlawfully" obstructed Yellow’s change-of-operations initiative in violation of the collective bargaining agreement, with the aim of blocking Yellow’s restructuring and destroying its business. This conduct, according to Yellow, drove the company into bankruptcy and wiped out 30,000 jobs.
IBT had previously endorsed the company’s modernization effort and even approved the first of the three phases before reversing course, taking what O’Brien called a “militant approach."
Yellow, in its suit, alleges that O’Brien was willing to allow the company to fail as a show of strength ahead of labor negotiations with UPS (CCJ Top 250, No. 2) and TForce Freight (No. 4).
The court further ruled in Yellow’s favor by rejecting the Teamsters’ argument that the NLRB has primary jurisdiction over this contract dispute, which clears the way for Yellow to amend its complaint and move forward on remand on its more than $1.5 billion claim against the Teamsters.
![Volvo Vnl Sleeper Review[20]](https://img.ccjdigital.com/mindful/rr/workspaces/default/uploads/2025/11/volvo-vnl-sleeper-review20.lrVppY9UDR.jpg?auto=format%2Ccompress&fit=crop&h=167&q=70&w=250)
