30,000 out of work as shipping firm Yellow ceases operations

Company says union 'refused to negotiate company's long-planned and necessary modernization effort'

30,000 out of work as shipping firm Yellow ceases operations

Yellow, one of America’s biggest shipping companies, officially closed shop after 100 years in business.

The company served the International Brotherhood of Teamsters (Teamsters) – which represents about 22,000 Yellow workers – legal notice of the ceasing of its operations on Monday. The company intends to file for bankruptcy.

“Today’s news is unfortunate but not surprising,” said Sean M. O’Brien, Teamsters general president. “Yellow has historically proven that it could not manage itself despite billions of dollars in worker concessions and hundreds of millions in bailout funding from the federal government. This is a sad day for workers and the American freight industry.”

Yellow received a $700-million pandemic relief loan from the federal government in 2020, which loaded further debt on to a struggling service, according to a report from The Guardian.

Yellow has not provided details of the development on its website or on social media as of writing.

The move puts in peril the jobs of some 22,000 Teamsters members and about 8,000 non-unionized workers.

In April, Bed Bath & Beyond (BBB) initiated a Chapter 11 bankruptcy filing, as it failed to gather the $300 million it needed in capital during its ongoing sales and stock price slump. And McDonald’s requested that workers work remotely over a three-day span as it prepared to lay off staff in the U.S. and in other countries.

Union ‘refused to negotiate’

Last week, Yellow said it was exploring opportunities to divest its third-party logistics company, according to The Guardian’s report. The report also noted that Yellow averted a Teamsters strike earlier this year.

On July 19, however, Yellow announced that Teamsters publicly claimed that the union may strike at the company over its failure to make its July contribution to Central States pension and health and welfare funds.

The employer claimed that a strike “would be anything but lawful, as it would violate the parties’ collective bargaining agreement”. In June, Yellow wrote to the funds, requesting a short-term deferral of its obligation to pay contributions for two months, July and August, with interest, the company said.

Yellow blamed Teamsters for putting the jobs of the 30,000 Yellow employees in danger.

“For many months, Teamsters’ leadership has steadfastly refused to negotiate the company’s long-planned and necessary modernization effort that would enable Yellow, a 100-year-old company, to streamline and strengthen its operations to compete against non-union carriers.”

Yellow is seeking to recover more than $1.5 billion in lost enterprise value, allegedly caused by the Teamsters, and it intends to continue with its breach of contract case against the union.

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