Union calls for workforce reforms post Yellow bankruptcy

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Updated Aug 9, 2023

Yellow Corp.'s tenuous relationship with the International Brotherhood of Teamsters (IBT) will not end with the former third-largest carrier in the nation's bankruptcy. 

The two sides have publicly traded barbs since March, and Yellow in June filed a $137 million lawsuit against the IBT, saying its ongoing delay of Yellow's business overhaul has cost the company at least that much. The carrier continues to pursue the suit, adding "the damages have grown since."

[RELATED: Teamsters want Yellow members 'first in line' for relief payments]

The IBT on Tuesday called for federal reforms to corporate bankruptcy laws following Yellow's Chapter 11 filing Sunday, which put 30,000 workers – 22,000 of which were Teamsters – out of work.

Among the protections IBT seeks are regulations that protect existing collective bargaining agreements to guarantee contracts are honored on the other side of bankruptcy by any future employers.

“As in the case of Hostess or what may be the future of Yellow Corp., existing investors or new buyers are allowed to purchase failed companies with the sole intent of restructuring them to kill labor contracts and bust unions,” said Teamsters General Secretary-Treasurer Fred Zuckerman.

Hostess, the maker of Twinkies and other confections, folded in 2012. It was acquired and re-opened a year later with a non-union workforce. 

“This cannot continue to be the status quo in America, not when workers are being robbed of their wages and retirement because of corporate incompetence," Zuckerman said. "The preservation of jobs and benefits to workers must be the primary objectives of Chapter 11, but they aren’t, and it has to change.”

Teamsters, since 2009, claim to have given back more than $5 billion in wages and benefits to Yellow in an attempt to keep the carrier solvent. Yet, ultimately, IBT's stonewall of Yellow's attempt to re-make itself into a lean "super-regional carrier" this year was the undoing of both parties. Yellow's Teamster membership made up about half of the IBT's LTL membership. 

“Corporate bankruptcy legislation in the U.S. is a joke," said Teamsters General President Sean M. O’Brien. "The rules are written to favor corporations in this country, not working people. We see this with federal labor laws as well with workers fighting an unequal system for more than 400 days to get a union contract. Workers need real relief and protection."

Yellow, in announcing its bankruptcy filing Sunday, cited the inflexibility of the union as a key contributor to its financial strife. The union, however, noted it's consistently made concessions over the years (more than $3.7 billion in voluntary wage cuts and more than $1.4 billion in pension benefit reductions) and without wage clawbacks and other guarantees, it wouldn't make any more. 

"Perennially mismanaged companies like Yellow should not be able to find safe harbor from accountability by simply filing for bankruptcy," O’Brien said. "Hardworking people routinely get left behind in this process when they should be at the front of the line to be paid and protected for the sacrifices they make to American employers.”

The Teamsters are calling on Congress and the White House to pass and enact new legislation that prioritizes workers throughout the corporate bankruptcy process, and are seeking legal safeguards that protect earned pension credits and retirement benefits and ensure payment of severance money owed to workers.

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.