A class-action suit filed Tuesday against Yellow Corp. said the company failed to provide a required 60 days’ layoff notice to its 30,000 employees.
The complaint was filed on behalf of California dockworker and union steward Armando Rivera and other “similarly situated former employees” in the U.S. District Court for the District of Delaware. Approximately 600 employees at a terminal in Bloomington, California, were terminated on or around Friday without advance notice, according to the lawsuit.
The class action includes all affected employees at Yellow and its four operating companies — YRC Freight, Holland, New Penn and Reddaway — not provided Worker Adjustment and Retraining Notification (WARN) Act notices.
The suit seeks wages and benefits for the required notification periods (90 days in New Jersey compared with 60 days in other states). It also seeks severance pay of one week for each full year worked for employees in New Jersey. In addition, the state has a statute entitling employees to “an additional four weeks of severance pay” when companies fail to provide advance notice.
Yellow notified most of its 8,000 nonunion employees on Friday that they were being terminated. It posted signs at its terminals on Sunday saying the company had ceased all operations.
The company filed WARN Act notices in a couple of states, including filings on Monday and Tuesday, but none were filed 60 days in advance.
The Teamsters union said late Sunday night it was notified that the company was filing for bankruptcy.
Failure to reach an agreement with the Teamsters union over a change of operations likely accelerated the company’s demise.
When negotiating with the union, Yellow made it known that it would be out of cash as soon as last month. Its customers began diverting freight to other providers in efforts to avoid having shipments stuck in Yellow’s network should it shut down abruptly. The pace of those diversions surged when it didn’t make benefits payments, which triggered a threat of a work stoppage.
Plaintiffs will have to navigate the WARN Act notice exception for abrupt shutdowns of failing companies. However, California and New Jersey have more labor-friendly interpretations of the law.
A separation agreement issued to employees at Yellow also referenced its WARN Act obligations, or lack thereof.
“The Company was not able to provide earlier notice of the Shut Down as it qualifies under the ‘unforeseeable business circumstances,’ ‘faltering company,’ and ‘liquidating fiduciary’ exceptions set forth in the WARN Acts,” the agreement read.
Also, Yellow will likely argue that it was in the process of obtaining financing and that the issuance of WARN Act notices would have deterred potential investors.
The separation agreement also provisioned for two weeks of severance for employees with the company nine years or less, and 0.25 weeks for each year of service for employees with the company 10 years or more. The document showed employees would also be paid for earned wages and accrued paid time off.
On Tuesday, employees at Yellow Logistics said they were terminated abruptly after assurances the company had funds to keep the independent subsidiary afloat while its parent searched for a buyer.
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Jorge
It funny how we don’t see teamsters on the picket line, it’s more like Yellow is striking the drivers…..divide and conquer!
30 plus years and many get paid like this while somebody is walking away with bonuses.
Larry Clinard
It takes a union to destroy a company and look like they trying to destroy America if you’re not Union celebrate you’ll keep having a job
Mike
When Consolidated Freightways went out of Bussiness I was the Inbound Supervisor at a Profitable terminal. I saw what it did to the young Men and Women that worked there , I saw a Shop Steward crumble not ever looking into the actual finances, the bottom line . That led to Teamsters members believing they deserved more . Unfortunately the same thing again is happening with Yellow . Many Families are going to suffer going through this and it’s a shame . ” Trust ” only comes from working on it , and Dis-Trust comes from not working at it . The Teamsters Union must take a good look at its Mission to its members , today it has failed them .
Mark Schloer
what good is a lawsuit to a bankrupt company going to do?
I ‘am utterly surprised that Investors/Board of Directors let Darren Hawkins remain at the helm of Yellow after years of deterioration of the business. what outcome did they think was going to happen?
I hope no one is surprised by the outcome.!
and I was not surprised that SO’B and the Teamsters stood their ground. they gave away lots of concessions to Yellow in the past to keep them afloat, at the cost of the members. but sad to see that many workers out of a job now.
Kelly
Michael you obviously know less about unions. Pretty ignorant comment. This company was not ran by the union this company was ran by CEOs that are greedy. I have watched them mismanage this company for 10 years I I’m really glad I don’t have to watch them continue to screw this company up.
Kurtis Springer
It’s to bad more locals aren’t following siut with these othere locals . Makes me wonder if there’s more going on then what there telling us
Richie
Will New York Teamsters be included in this class action lawsuit against yellow and if not how do I go about filing one
Judah Seidman
My previous comment had an incorrect email address for me