The International Brotherhood of Teamsters said it has rejected a change of operations (COO) presented by less-than-truckload carrier Yellow Corp. after talks between the two parties broke down on Thursday.
The IBT said the carrier’s efforts to push through the current changes “would subvert bargaining” and violate article 7 of the union’s constitution, which lays out the grievance process.
Yellow’s (NASDAQ: YELL) planned changes would consolidate operations at regional carriers New Penn and Holland with its national freight network. Yellow’s goal is to move to a super-regional structure while also providing national and transcontinental service. The terminal consolidations would reduce operating expenses and eliminate multiple drivers calling on the same customer location, while the gains from the property sales would allow Yellow to chip away at its $1.6 billion in debt, the majority of which comes due next year.
“[IBT General Secretary-Treasurer] Fred Zuckerman and I have been all over this country meeting with our freight members, who repeatedly tell us the company’s proposed changes to the contract are unacceptable,” said Sean O’Brien, Teamsters general president, in the notification.
The proposed COO would realign ZIP codes covered by more than 200 terminals in the East, Central and South regions, redefine work rules and require some employees to rebid for jobs.
Yellow’s management has said that a total of 28 terminals would be closed in the process.
Another major sticking point was the creation of utility positions, which require drivers to perform work at various terminals as well as handle freight on the docks. However, Yellow’s revised COO filed in February reduced the number of those positions from 998 to just 121.
“The Teamsters demand that established work standards and contractual protections be maintained, that primary lanes be preserved, and traditional road driver classifications and dock workers be protected,” the statement said.
The union also said it canceled an upcoming meeting with Yellow planned for April 5-7.
“Yellow doesn’t want to put this to a vote because they know the Teamsters Constitution and they know our members will unanimously reject their proposal,” O’Brien said. “This company doesn’t get to run around and ignore workers’ rights. We’re not playing games.”
However, the carrier disagrees. In a statement provided to FreightWaves, Yellow called on the IBT to put the measure to a vote.
“Unfortunately, the IBT has been mischaracterizing our statements and positions,” the statement said. “For months, we have worked in good faith with more than 100 local unions as well as Teamster leadership to address issues and concerns of our employees. Let employees make their own decisions about Yellow’s continued modernization efforts and their future job security.”
Yellow executed a similar restructuring of 89 YRC Freight and Reddaway facilities in the West last year. Those modifications received IBT approval.
Yellow maintains the full overhaul of the network is vital to its success and something its customers are demanding.
“As we have listened to our employees, we have also listened to our customers who have determined what they prioritize: speed, reliability and competitive pricing,” the statement read. “With One Yellow changes underway, we are providing enhanced service in the West and hope to continue building on our success.
“In a time when today’s trucking industry is predominantly non-union, our One Yellow strategy will help preserve more than 22,000 well-paying union jobs,” Yellow said. “This is an unfortunate attempt to halt Yellow’s modernization efforts … which have been in the works and well-publicized since 2019.”
The current back-and-forth is likely a prelude of more to come.
The labor contract between the two parties expires March 31, 2024, and O’Brien has recently vowed “to fight like hell” to “secure lucrative agreements” heading into negotiations with union LTL carriers TForce Freight, a TFI International (NYSE: TFII) company, and ArcBest (NASDAQ: ARCB).
However, labor negotiations with Yellow won’t likely begin until later this year. Barring a major inflection in the macroeconomic backdrop, the Teamsters union will find itself once again bargaining with a financially struggling Yellow. The company continues to slide in and out of profitability, faces looming debt maturities and has said the implementation of the COOs are the linchpin to its survival.
“The 1.2-million-member union is continuing to take a harder look at Yellow’s finances and analyze its ability to maintain operations under the existing agreement,” the IBT’s statement read.
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