Teamsters at less-than-truckload carrier Yellow Corp. will not be on strike Monday as previously planned. Central States Funds agreed Sunday to extend health care benefits for employees at YRC Freight and Holland.
Yellow (NASDAQ: YELL) now has 30 days to pay $50 million to catch up on its benefits payments. A statement from the Teamsters said it expects the company to make the payments within the next two weeks.
“The intense discussions between Teamsters leadership and Central States successfully convinced fund trustees to reverse their previous decision that health care benefits would end on July 23 if Yellow remained delinquent,” the statement read.
It appears Yellow and the Teamsters are headed back to the table.
The union’s negotiating committee will meet with Yellow representatives Sunday night in Washington, D.C. “to review the state of the company and the current contract.”
“As the Teamsters and Yellow sit down, the reversal by Central States will keep health care benefits paid and hardworking Teamsters on the job for the time being,” the release said.
In recent months, the two parties failed to reach an agreement over a proposed change of operations that the carrier said was the key to its survival. Through the process, Yellow has been losing market share as shippers and 3PLs steer freight away from the company concerned over its ability to keep its doors open.
The breaking point came last weekend when Yellow missed contractually required benefits payments to Central States Funds. The debt-heavy, cash-strapped company previously asked to defer the payments with interest, to no avail even though Central States had granted such requests in the past.
The company lost a hearing in a federal court on Friday, which would have barred the Teamsters from a work stoppage. Up until the last-minute extension on Sunday, Teamsters at YRC Freight and Holland were preparing to strike over the missed payments, which would have left them without health insurance.
No mention was made about missed contributions to the pension fund. Yellow’s participation in that fund was expected to be terminated on Sunday.
“Your Honor, the situation here for Yellow and the stakeholders is binary,” said Yellow’s attorney Marc Kasowitz in court on Friday. “If there’s a strike, the company is gone. If a strike is at least temporarily enjoined … then there’s some possibility for the company to survive.”
It’s still unclear where the company stands with contributions to its second- and third-largest funds. A July 13 letter from Yellow CEO Darren Hawkins to Teamsters General President Sean O’Brien said the company wouldn’t be able to make those upcoming payments either.
“Our members at YRC Freight and Holland cannot work without health care, and the Teamsters worked tirelessly to ensure an immediate strike at Yellow could be averted,” O’Brien said in the Sunday statement. “These discussions were not easy, but Central States has made meaningful movement under pressure from the union. We are seeking a real resolution, but let this solution today serve as a profound reminder that our members can only endure so many sacrifices.”
A request for comment from Yellow was not made by the time of this publication.
More FreightWaves articles by Todd Maiden
- Yellow’s fate likely in hands of Kansas district court
- Knight-Swift reels in 2023 outlook after poor Q2
- Pam Transportation sees earnings fall 60% in Q2
Alex D.
Screw yellow & the teamsters. They deserve what they get in having faith in a bunch of crooks. Yellow. Will never pay back the massive bailout they got and pocketed the money and will leave all high and dry in the wake of theft
Ronnie Kilgore
Roadway was a Profitable Debt Free Company until Yellow Bought them !!!! Yellow Changed the Name to YRC & Yellow Sold Off all the Roadway Accents & Drained all the Cash & Gave themselves Big Bonuses & Changed the Name from YRC back to Yellow !!!! Yellow Owes Millions to the Teamsters Helth & Welfare Fund & if they can get by without Paying that’s exactly what the will do. Yellow is just like a Holding Company !!!! Get all the Cash they can get & Close it Down !!!!! Watch & See what i’m telling you will happen soon or later !!!!
John Kopp
Yellow didn’t make June’s payment. They already said they’re not going to pay July’s payment, and they’re going to be out of money in August. What are you extending them out 30 days for. Yellow is going to expect and demand you make concessions to them.