Yellow Corporation, the nation’s fifth largest transportation company, filed a $137 million lawsuit against the International Brotherhood of Teamsters, alleging a breach of contract.
The trucking company, based in Nashville, Tennessee, filed the complaint against the U.S. District Court for the District of Kansas earlier this week, accusing the union of violating a contract and causing millions in damages.
“The breaches, orchestrated by Sean O’Brien, IBT’s recently elected General President, have unjustifiably blocked restructuring efforts essential to plaintiffs’ survival and success and have already caused plaintiffs over $137 million in damages,” the complaint charges.
It goes on to assert that “If not cured immediately, these breaches will also result in the liquidation of the Company,” as well as “severe harm to the United States supply chain and economy.”
“For many months, we have made good faith efforts to meet with the IBT to propose a path forward that works for all parties, but they refuse even to meet, let alone engage in honest talks,” management at Yellow stated in a press release.
The complaint centers around the union’s alleged blocking of modernization efforts, which the company claims are essential to Yellow’s survival. “Without these crucial reforms, which are standard practice in the industry today, Yellow likely will not survive,” the press release states before warning that “30,000 jobs will be lost, including 22,000 union jobs, and its shareholders, including the federal government, which owns 30.1% of Yellow stock, will be severely damaged.”
The company specifically contends that “Sean O’Brien, IBT General President, orchestrated these breaches and has prevented Yellow from meeting with IBT leadership.”
“Today, our 30,000 jobs, mostly union jobs, are in serious jeopardy because the leadership at the International Brotherhood of Teamsters refuses to come to the table to discuss the future of our employees,” Yellow CEO Darren Hawkins said in a video posted to Twitter.
After repeated attempts to work with the International Brotherhood of Teamsters — attempts rebuffed at every turn — to come to an agreement on Yellow’s ongoing modernization, we have made the difficult decision to take legal action. pic.twitter.com/Gly6iY9ZVi
— Yellow (@Yellow_Trucking) June 27, 2023
“We’re working to compete in a way that aligns with the union, but their leadership still refuses to meet,” Hawkins added.
Meanwhile, the International Brotherhood of Teamsters responded to the lawsuit, which it described as “baseless.” Teamsters General President Sean O’Brien claimed that “Yellow Corp.’s claims of breach of contract by the Teamsters are unfounded and without merit.”
“Yellow blew through a $700 million bailout from the federal government, and now it wants workers to foot the bill,” O’Brien alleged.
The International Brotherhood of Teamsters is also preparing to initiate a strike against the United Parcel Service (UPS) if the company and the union do not reach an agreement by July 31st. A strike could severely disrupt supply chain operations, which could result in product shortages and price increases.