In 2023, the 96-year old trucking company Yellow Corporation filedfor bankruptcy in the midst of a dispute with the International Brotherhood of Teamsters. Yellow attempted to restructure in the face of high debt levels in a bid to keep the company afloat, but the Teamsters blocked the plan and threatened a strike.
Yellow shut down and 30,000 people – including 22,000 Teamsters – were left unemployed.
In its final months, Yellow filed a lawsuit against the Teamsters, seeking to hold the union accountable for the bankruptcy. The lawsuit alleged that the Teamsters agreed to the first step of the restructuring plan in 2022, but then stonewalled the second step in 2023 – just when Yellow needed it most.
All the while, the Teamsters seemed to celebrate the Yellow’s bankruptcy. Teamsters President Sean O’Brien called Yellow’s CEO a “greedy piece of sh*t,” and spent the company’s last days sending him insulting and childish text messages – even though the jobs of 22,000 Teamsters hung in the balance.
Here’s how Yellow described the Teamsters actions in the original lawsuit:
“Despite his obligations as President of the Union to its members, Mr. O’Brien plainly does not care about the 22,000 Yellow IBT employees whose jobs now hang in the balance as a result of the Union’s contractual breaches, nor does he care about the damage he will cause to America’s supply chains and the economy, or the higher consumer prices that will result from loss of competition in LTL freight shipping. He and the Union are focused instead on the bigger prizes of negotiating with UPS and unionizing Amazon.”
A US District Court dismissed the initial lawsuit brought by Yellow, but a Court of Appeals just overruled that dismissal, reviving Yellow’s legal action against the Teamsters in a unanimous ruling.
In a statement on the ruling, Yellow’s lawyers wrote that the Court “held that Yellow’s ‘factual allegations supported [its] overarching theory that the Teamsters’ ultimate plan was to ‘stall the Phase 2 [restructuring plan], blindly decline all proposals by Yellow, and foment an illegal strike.’”
Yellow’s lawyers also reiterated the company’s desire to hold the Teamsters accountable for over $1.5 billion in alleged damages.
For its part, the Teamsters published social media posts blaming the company “alone” for going out of business, and released a statement calling the lawsuit baseless.
Now that the lawsuit is back on, we’ll soon know if that’s true.