Yellow: Union shares blame for financial woes

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Updated Jul 20, 2023

International Brotherhood of Teamsters' (IBT) pending strike at Yellow Corporation (CCJ Top 250, No. 6) would violate the parties’ collective bargaining agreement, and the IBT itself shoulders some blame for Yellow's precarious financial condition, the carrier claimed in a statement Wednesday night

Yellow failed to make a payment to the Central States Health and Welfare Fund and the Central States Pension Fund due July 15, and the Central States Board of Trustees voted Monday to suspend health care benefits and cease pension accruals effective Sunday. In response, Teamsters said they would prepare for a possible strike as early as Monday, July 24.

"This is a sad day. After billions of dollars in concessions and work rule flexibilities our members have given these companies over the last 13 years, for them to miss these payments is shameful and an insult to the thousands of Teamster families who have sacrificed so much for so long to keep these companies alive," said Teamsters National Freight Director John A. Murphy.

Yellow in June requested a short-term deferral of its obligation to pay contributions to the funds for two months; July and August, with interest. The Board, however, declined the request. IBT has claimed the missed payment and pending suspension of benefits are grounds for a strike, "but a strike would be anything but lawful," Yellow claimed. "The union’s breaches of the collective bargaining agreement, which are detailed in the complaint Yellow filed in its District of Kansas lawsuit against the Teamsters, are the direct cause of Yellow’s inability to make contributions to the funds."

IBT has not been thinly veiled in sharing its opinions of Yellow and its senior leadership. 

Teamsters General President Sean O’Brien has blamed Yellow for failing its workers, citing "gross mismanagement" of a "deadbeat company."

"Yellow has a responsibility and obligation to workers. Our members should not suffer because of management’s incompetence and financial irresponsibility. This is a new low, even for a company as dysfunctional as Yellow,” added Teamsters General Secretary-Treasurer Fred Zuckerman. 

However, Yellow contends that it is IBT leadership who has failed the 22,000 Teamsters employed by Yellow and the 8,000 non-union employees "who may soon become the Teamsters’ collateral damage."

The two sides are warring over implementation of the carrier's One Yellow strategy to improve efficiency, speed, choice and value for its customers. Phases 2 and 3 of One Yellow, which include aligning operations in the Northeast, Midwest, Southeast and Central regions, are set to take place this year. Phase 1, integrating the linehaul networks of YRC Freight and Reddaway in the Western region to support both regional and long-haul services, was completed last year with union approval. 

Teamsters have blocked further rollout, citing that the changes violate the union's current labor agreement with the fleet – a charge Yellow has denied and claims the IBT roadblock has cost the company more than $137 million over the past nine months. The current collective bargaining agreement between the Teamsters and Yellow expires March 31, 2024.

"Ever since Teamsters’ leadership made its request that Yellow open its contract early, Yellow has tried to meet to negotiate a contract that would provide wage increases for its Teamster employees. In fact, just last week, Yellow made yet another proposal to the Teamsters, offering a significant wage increase that aligns with its union competitors," the company claims. "Commencement of meaningful negotiations with the Teamsters would set the stage for Yellow to reengage in comprehensive refinancing efforts with its lenders while clearing a path to advance One Yellow. All stakeholders – lenders, shareholders, employees, and customers – need to see progress."

Teamsters claim Yellow CEO Darren Hawkins issued two letters to the union attempting to broker "a back-door deal to rescue his humiliatingly mismanaged freight company," just before missing the July 15 benefits payment. 

"From July 12-13, Hawkins made informal offers to the Teamsters begging the union to return to the bargaining table well before the expiration of the current contract, suggesting the beleaguered freight company could offer workers hourly increases of just over $2 in the first year of a hypothetical new contract," the union said in a statement Thursday morning. "Shockingly, the communications from Yellow were stipulated on the Teamsters agreeing to a new five-year contract as quickly as possible. Further, the letters from the CEO spelled out that Yellow would only be in the position to make required benefits payments if the union swiftly entered into negotiations and agreed to a “prompt resolution.”

IBT said O’Brien responded in writing to both requests from Yellow on the days they were received, blasting Yellow "for attempting to tether wage increases to future commitments from the union in an unnegotiated new deal." 

"It is not left to rank-and-file Teamsters to drag Yellow’s sinking ship to shore," said O’Brien. "We are not going to agree to informal offers for new wages in the hopes of getting a fair contract next year when YRC Freight and Holland can’t even figure out how to pay their bills right now.”

"In short, Teamsters leadership’s obstruction of One Yellow directly caused Yellow’s liquidity crisis and Yellow’s need to implement cash-conservation measures, including its benefit funding deferral request," the company wrote in its Wednesday statement. "For nine months, Yellow has been ready, willing, and able to meet with the Teamsters at any time and at any place to discuss the future of its union and non-union employees and to work through the implementation of One Yellow. Even today, the company remains ready, willing, and able to hold serious negotiations."

Jason Cannon has written about trucking and transportation for more than a decade and serves as Chief Editor of Commercial Carrier Journal. A Class A CDL holder, Jason is a graduate of the Porsche Sport Driving School, an honorary Duckmaster at The Peabody in Memphis, Tennessee, and a purple belt in Brazilian jiu jitsu. Reach him at jasoncannon@randallreilly.com.