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Dive Summary:
- Yellow Corp. asked a federal bankruptcy court this week to dismiss a class-action lawsuit alleging the company failed to give employees adequate notice of layoffs as it filed for bankruptcy last summer.
- The bankruptcy happened too quickly for the company to provide the required 60-day notice before layoffs, but Yellow had repeatedly explained the circumstances to employees, the stricken carrier he said in a statement.
- The company’s lawyers at Kirkland & Ellis have asked for a March 26 deadline to file any objections and an April 11 hearing to go before the court.
Dive Insight:
In the filing, Yellow described a “knife-edge transition” that saw her business unravel in just nine days last summer.
The largest LTL union carrier ever received over 40,000 shipments per day as of July 17th. After its request to delay pension payments prompted a strike threat the next day, that figure fell to 10,000 shipments on July 21, down from nearly zero on July 26, Yellow said in the filing.
The company, which blames the Teamsters for its demise, said it sent notices to employees expressing concerns about the outcome of the union’s reluctance to move forward with modernization of the One Yellow network.
“No reasonable employee can claim that he did not know why Yellow was conducting a mass layoff or why he could not have given earlier notice,” the filing said.
In the 60 days before the slowdown, Yellow was actively seeking financing to improve its liquidity, including negotiating with potential financiers “even after the Union issued the strike threat,” its filing said.
“Issuing a WARN warning for massive layoffs of almost the entire workforce would have crushed any chance of saving the Company,” it said.
Yellow’s competitors quickly acquired much of its freight and terminal network in the largest bankruptcy in trucking history.