Lawsuit against Yellow claims WARN Act violations

August 3, 2023

Tyson Fisher

|

A class-action lawsuit has been filed against Yellow Corp. for alleged violations of the Worker Adjustment and Retraining Notification (WARN) Act.

On Aug. 1, Armando Rivera filed a class-action lawsuit in a Delaware federal court against Yellow. The lawsuit claims that the company violated the WARN Act by not providing 60 days advance written notice of terminations.

According to the Department of Labor, The WARN Act requires employers with 100 or more full-time employees to provide at least 60 calendar days advance written notice of a worksite closing affecting 50 or more employees, or a mass layoff affecting at least 50 employees and one-third of the worksite’s total workforce or 500 or more employees at the single site of employment during any 90-day period.

Not all dislocations require a 60-day notice. The WARN Act makes certain exceptions to the requirements when employers can show that layoffs or worksite closings occur due to faltering companies, unforeseen business circumstances and natural disasters. In such instances, the WARN Act requires employers to provide as much notice to their employees as possible.

The lawsuit comes shortly after news of Yellow ceasing operations and filing for bankruptcy.

On July 31, the Teamsters announced in a news release that Yellow will be ceasing operations and filing for bankruptcy.

“Today’s news is unfortunate but not surprising,” Teamsters General President Sean M. O’Brien said in a statement. “Yellow has historically proven that it could not manage itself despite billions of dollars in worker concessions and hundreds of millions in bailout funding from the federal government. This is a sad day for workers and the American freight industry.”

The move by Yellow will put tens of thousands of employees out of work, including about 22,000 union members. As of publication, no other details of the bankruptcy were known.

On July 23, the International Brotherhood of Teamsters announced that a potential strike with Yellow employees had been averted.

The Teamsters had threatened to strike on July 24, if the company had not rectified delinquent health and welfare and pension contributions.

According to a news release, the Central States Health and Welfare Fund agreed to extend health care benefits for Yellow employees working under YRC Freight and Holland. Had the extension not been granted, benefit suspensions would have gone into effect July 23.

“Our members at YRC Freight and Holland cannot work without health care, and the Teamsters worked tirelessly to ensure an immediate strike at Yellow could be averted,” O’Brien said in a statement. “These discussions were not easy, but Central States has made meaningful movement under pressure from the union. We are seeking a real resolution, but let this solution today serve as a profound reminder that our members can only endure so many sacrifices. Teamsters at Yellow simply work too hard and have already given so much.”

On July 21, the U.S. District Court for the District of Kansas ruled against Yellow, denying the company’s request for an injunction to stop the Teamsters from striking over the delinquent benefit contributions. At the time, O’Brien threatened to strike if the problem was not resolved. LL

Related stories: