Trucker Yellow Is Suing Teamsters
Union Over Changes to Operations

A freight truck operated by Yellow, a less-than-truckload operator in the U.S. trucking market. PHOTO: YELLOW CORP.

Relations between trucker Yellow and the Teamsters union are growing more rancorous as the two sides negotiate a new multiyear labor agreement.

The trucking company filed a suit against the International Brotherhood of Teamsters on Tuesday, claiming the union is unjustly blocking a restructuring plan aimed at modernizing Yellow’s operations to better compete in the U.S.’s $58 billion less-than-truckload, or LTL, market.

Yellow said its proposed changes in operations are crucial if it is to survive in an industry dominated by nonunion carriers, particularly given the company’s need to refinance $1.3 billion in debt from loans maturing next year.

The Nashville, Tenn.-based company wants some drivers to do more work on docks, loading and unloading freight, and to use more transportation purchased from outside companies, including railroads and nonunion companies.

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Yellow said it has the right under the current labor contract to implement what it calls its “One Yellow” plan to restructure its operations and is seeking $137 million in damages from the Teamsters for allegedly breaching that agreement.

“Without these crucial reforms, which are standard practice in the industry today, Yellow likely will not survive,” Yellow said in a statement.

Yellow’s shares fell 22% to 99 cents a share in trading Tuesday.

Calling the lawsuit unfounded, Teamsters General President Sean M. O’Brien responded Tuesday that the union has adhered to the terms of its contract and that Yellow is asking workers to pay the price after blowing through a $700 million bailout from the federal government.

“For a company that loves to cry poor, Yellow’s executives seem to have no problem paying a team of high-priced lawyers to wage a public relations battle—all in a failed attempt to mask their incompetence,” he said.

The union, which represents some 22,000 workers at Yellow, said in March that it had “forcefully rejected” Yellow’s plan to go ahead with the changes.

The two sides started negotiating this year to replace a multiyear agreement that expires on March 31, 2024.

Yellow is the third-largest operator in the LTL business, in which carriers haul shipments from multiple customers on the same truck between factories, warehouses and retail stores, according to SJ Consulting. The company has struggled financially for several years, and cash holdings fell to $154.7 million at the end of this year’s first quarter ended March 31 from about $439 million at the end of 2020.

Yellow’s first-quarter net loss nearly doubled to $54.6 million as revenue declined in what executives called a soft freight environment. Rival nonunion carrier Old Dominion Freight Line, which has grown faster than Yellow in recent years, reported a $285 million net profit in the first three months of the year that was down 4.9% from the same quarter a year ago.

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