Dive Brief:
- Yellow Corp. asked a federal bankruptcy court this week to throw out a class-action lawsuit alleging the company failed to provide employees adequate notice of layoffs as it spiraled into bankruptcy last summer.
- The bankruptcy happened too quickly for the company to provide the required 60 days’ notice before the layoff, but Yellow had repeatedly explained the circumstances to employees, the defunct carrier said in a filing.
- The company’s attorneys at Kirkland & Ellis requested a March 26 deadline for any objections to be filed and an April 11 hearing for them to be raised before the court.
Dive Insight:
In the filing, Yellow laid out a “knife-edge transition” that saw its business unravel in just nine days last summer.
The once-largest unionized LTL carrier had been picking up over 40,000 shipments a day as of July 17. After its request to defer pension payments prompted a strike threat the next day, that rate dwindled to 10,000 shipments on July 21, to nearly zero on July 26, Yellow said in the filing.
The company, which blames the Teamsters for its demise, said it had sent communications to employees expressing its concerns about the result of the union’s unwillingness to move forward with its One Yellow network modernization.
“No reasonable employee can claim that they did not know why Yellow conducted a mass layoff or why it could not have given notice sooner,” the filing said.
In the 60 days before it went belly-up, Yellow was actively seeking financing to improve its liquidity, including negotiating with potential financiers “even after the Union issued its strike threat,” its filing said.
“Issuing a WARN notice of a mass layoff of nearly the entire workforce would have crushed any opportunity to save the Company,” it said.
Yellow’s competitors quickly scooped up much of its freight and terminal network in the biggest bankruptcy in trucking history.
