No Strike At Yellow After Central States Grants 30 Day Extension
The trucking company Yellow has 30 days to pay $50 million to catch up on its benefits payments. The Teamsters, the union representing truck drivers, expects the company to make the payments within the next two weeks.
Todd Maiden, FreightWaves
The strike planned for Monday by the Teamsters of Yellow Corp., a less-than truckload carrier, will not take place. Central States Funds has agreed to extend health benefits for employees of YRC Freight and Holland.
Yellow has now 30 days to make up the $50 million in unpaid benefits. The Teamsters stated that they expect the company to pay the $50 million within two weeks.
The statement stated that 'the intense discussions between Teamsters Leadership and Central States convinced fund trustees of their previous decision to reverse their earlier decision that health benefits would be terminated on July 23, if Yellow remained in delinquent'.
Yellow and the Teamsters appear to be heading back to the table.
The union's negotiation committee will meet Yellow representatives in Washington, D.C. on Sunday night to'review the state of Yellow and the current contract'
The release stated that 'while the Teamsters and Yellow are sitting down, Central States' reversal will keep health benefits paid for now and the hardworking Teamsters at work'.
In recent months the two parties were unable to agree on a proposed operation change that was deemed crucial to the carrier's survival. Yellow has lost market share through this process as shippers, 3PLs and other parties have diverted freight from the company. They are worried about its ability to stay open.
Yellow's failure to pay Central States Funds the contractually-required benefits last weekend was the breaking point. The cash-strapped, debt-laden company had previously requested to defer payments with interest. Central States had granted similar requests in the past.
The company lost an appeal in federal court Friday that would have prevented the Teamsters from going on strike. Prior to the extension granted on Sunday at the last minute, Teamsters from YRC Freight and Holland had been preparing for a strike due to the missed payments. This would have meant that they were without health insurance.
The pension fund was not mentioned. Yellow's participation to that fund is expected to end on Sunday.
Yellow's lawyer Marc Kasowitz told the court Friday that the situation for Yellow and its stakeholders was binary. If there is a strike, then the company will be gone. If a temporary strike is enjoined, then the company has a chance to survive.
The company's contribution to the second and third largest funds is still not clear. In a letter dated July 13, Yellow CEO Darren Hawkins told Teamsters General president Sean O'Brien that the company would not be able make these upcoming payments.
In a statement released on Sunday, O'Brien stated that 'our members at YRC Freight and Holland can't work without health insurance, and the Teamsters have worked tirelessly to prevent an immediate Yellow strike.' Central States made significant progress under the pressure of the union during these discussions, which were not easy. Our goal is to find a real solution, but this resolution today should serve as a reminder that our members are only capable of so much sacrifice.