The teamsters are demanding answers as Yellow Corporation’s bankruptcy case takes center stage in Capitol Hill. During a special Senate Judiciary Committee hearing, Senator Amy Klobuchar (D-Minn.) shed light on the rapid pace of Yellow’s proceedings, suggesting that this haste might be leaving laid-off employees in the dust.
“After a company files for Chapter 11, as we all know, employees risk losing their livelihoods, health benefits [and] pensions through no fault of their own. These are things that workers have worked hard for and have earned,” Sen. Klobuchar said during the hearing. “This issue has become relevant in a big way to my state because just last month, Yellow Corp., one of the largest LTL carriers in the country, filed for bankruptcy. This bankruptcy jeopardizes the livelihood and health benefits of many hardworking Minnesotans, including 480 Minnesota Teamsters.”
Melissa Jacoby, the Graham Kenan Professor of Law at the University of North Carolina at Chapel Hill, discussed the purpose of Chapter 11 proceedings during her testimony before the committee, specifically addressing Klobuchar. She emphasized that the primary goal of these proceedings is to facilitate company restructuring while also safeguarding workers and preserving employment opportunities.
“One thing that I worry about is that workers can be used to ask for justification to ask for things that aren’t actually in the bankruptcy code,” said Jacoby, “that this quick sale will save jobs. That agreeing to a loan at a very high interest rate will save jobs, and yet there’s often no guarantee. I think there should be more examination of jobs and the quality of those jobs in that kind of scenario, and we need to look at employment as well as the union context.”
The recent hearing did not focus on Yellow. Instead, it aimed to encourage productive discussions concerning Chapter 11 bankruptcy and various companies, such as Johnson & Johnson and 3M, faced criticism from lawmakers for their past use of Chapter 11.
Following the meeting, the International Brotherhood of Teamsters (IBT) called on Senators Dick Durbin and Bernie Sanders to investigate Yellow Corp.’s bankruptcy proceedings. The IBT urged them to hold hearings before the Senate Committee on the Judiciary and the Health, Education, Labor, and Pensions (HELP) Committee.
The Fall of Yellow
Yellow filed for Chapter 11 bankruptcy on August 6, finally resolving the speculation about its financial troubles. Currently, it is in the process of liquidation, with Estes Express Lines and Old Dominion Freight Line competing to buy its assets with bids over $1 billion each. The current leader is Estes Express Lines with a $1.525 billion bid for 169 Yellow terminals, as stated in court records.
The proceeds from the sale will primarily go to cover Yellow’s outstanding debt of over $2.5 billion. Unfortunately, the Teamsters believe that the quick nature of the process leaves little hope for salvaging jobs through asset acquisition and re-establishing operations.
The Teamsters union has made significant concessions to Yellow since 2009, sacrificing over $5 billion in wages and benefits to support the struggling carrier. However, their resistance to Yellow’s transformation into a more efficient “super-regional carrier” has ultimately led to the downfall of both parties. The Teamsters’ membership at Yellow accounted for roughly half of their overall membership in the industry.
“Yellow is trying to fast track liquidation. Meanwhile, more than 22,000 union workers are out of work after sacrificing more than $5 billion over the past 14 years through wage and benefit concessions, a fact the company would prefer to conceal from the American public and the bankruptcy courts,” said Teamsters General Secretary-Treasurer Fred Zuckerman. “We haven’t had bankruptcy reform in this country for nearly two decades. We need to take this opportunity to right the wrongs at Yellow and prevent them from happening again.”
Yellow has taken legal action against the IBT by filing a lawsuit worth $137 million. The company claims that the delay in implementing Yellow’s business overhaul has resulted in significant losses. Despite filing for bankruptcy, Yellow is still determined to pursue the lawsuit. The company has also stated that the inflexible stance of the union has played a major role in their financial difficulties.
Source: CCJ Digital
