Yellow, Teamsters ‘moving fast’ as both sides negotiate over One Yellow changes

The International Brotherhood of Teamsters (IBT) and Yellow Corp., which controls about 8% of the national less-than-truckload (LTL) market, are “moving fast” toward negotiating a settlement over a major change of operations that Yellow says is vital to revitalizing the 94-year-old trucking company, a source close to the talks tells LM.

But as in most negotiations with the Teamsters, some harsh rhetoric is occurring ahead of any agreement.

In a June 5 memo to the Teamsters rank and file, the IBT’s National Freight Director John Murphy characterized Yellow’s most recent effort to get One Yellow implemented as “offensive” to the union. 

“What is truly offensive is the utter disregard IBT senior leadership has for the 22,000 Teamsters’ Yellow employees who are now at serious risk of losing their good paying union jobs,” the company replied.

The Teamsters have moved up labor talks with Yellow Corp. by a year. That National Master Freight Agreement with Yellow expires on March 31, 2024. But both sides have been unable to reach terms on the carrier’s proposed changes to the company’s “One Yellow” operation and have agreed to settle that dispute within the overall collective bargaining contract.

“We are committed to completing our One Yellow strategy, which will strengthen our company, protect 22,000 union jobs and ensure that our customers are well cared for and receive the range of services that today’s market demands,” a Yellow spokeswoman said. “Throughout this process, we have listened to our employees and customers and have made adjustments to our strategy.”

Yellow said it now “prioritizes speed, reliability and competitive pricing” in logistics decisions.

“With One Yellow in place in the Western United States, we are providing these enhanced services to our customers,” the Yellow spokeswoman added. “Our strategic plan includes implementing One Yellow nationwide.”

But that transformation to a “super regional” LTL carrier so far has been blocked by the Teamsters union. The Teamsters’ objections include:

• Changes of operations that require some road drivers to perform dock work;
• Erosions of work rules and long-established operational practices; and
• Increased use of purchased transportation. Yellow wants to be able to divert 29% of all road miles to non-union carriers or rail

“Asking every driver to work the dock has never been part of the company’s proposal. Under Yellow’s proposal, approximately 20% of the company's line haul drivers based at certain facilities will be asked to bid on work requiring them to both drive and work the dock.  Even then, drivers would be able to bid on these jobs, based on seniority,” a Yellow spokeswoman said.

Overall, this proposal would cover just 1/5th of Yellow’s approximately 6,000 line haul drivers, she added. 

In exchange for these changes, on May 30 Yellow offered to accelerate the 40-cent-an-hour contractural wage increase scheduled for October. Yellow is discussing adding 60-cent-an-hour increases to that amount.

“The (Letter of Agreement proposed by Yellow) is a one-way street in favor of the company,” the Teamsters said in response to Yellow’s May 30 proposal. “As such, it is a non-starter and the company’s conduct is offensive.”

In response, Yellow told the Teamsters that “while the trucking industry remains predominantly non-union, Yellow has always been a proud IBT employer.” Its One Yellow strategy will help preserve thousands of Teamster jobs while strengthening Yellow for many years to come.

“Since 2019, Yellow has been executing One Yellow to transform Yellow from several regional carriers into a single, streamlined super-regional carrier,” Yellow said in a statement.

The company said by integrating its operating companies and network into a super-regional carrier, Yellow will strengthen jobs while greatly improving its competitive position in a marketplace increasingly dominated by non-union carriers.

“One Yellow will enable Yellow to process higher freight volumes more efficiently, reduce operating expenses, and enhance its profitability for the benefit of all Yellow stakeholders, including the 22,000 Teamsters it employs,” the company said.

It called the implementation of One Yellow this year as “critically important” to Yellow. Last year, Yellow successfully rolled out Phase 1 of One Yellow in the Western region of the United States, an area that equates to approximately 20% of Yellow’s network.

Yellow was able to get the Phase 1 change-of-operations approved last September. Since then, Yellow’s newly integrated West Coast network has already started to yield benefits for customers that formerly used the Reddaway regional LTL operation, which was a Yellow subsidiary.

Immediately after completing Phase 1 of One Yellow in October 2022, it engaged the Union in rolling out Phase 2, which addresses operations in the Northeast, Midwest, and Southeast and equates to 70% of Yellow’s network. This included regions formerly run by the Holland and New Penn regional subsidiaries of Yellow.

It had intended to implement Phase 2 by the end of 2022. To do this, Yellow followed the same change-of-operations procedures for Phase 2 as it had for Phase 1 and modeled its Phase 2 change-of-operations documents on those the Union had previously approved during Phase 1.

But earlier this year, after the company had substantially revised its original Phase 2 change-of-operations based on union input, the Teamsters stopped the implementation of One Yellow “abruptly in its tracks,” the company said.

The Teamsters decided to hold up the change-of-operations process as leverage to extract wage increases. “For six months, and counting, after Yellow first proposed the Phase 2 change-of-operations, which mirrored the Phase 1 change-of-operations the union approved in September 2022, the union still has not agreed to its implementation,” the company said.

Yellow said it has nonetheless tried to reach an amicable resolution. While the union has refused to move forward with Yellow’s proposals under the contractual grievance procedures, or to let Yellow’s Teamsters employees vote to ratify the proposed changes, the union instead made a number of extra-contractual demands on Yellow, according to the company.

“Each time it has made a new demand, Yellow has acceded to the union’s demands, with the expectation that accession would lead to implementation of the overdue Phase 2,” the company said.

“By stonewalling Yellow’s implementation of Phase 2, the union has impaired Yellow’s ability to continue as a going concern and jeopardizes the jobs of its members,” the company said. “Indeed, far from taking reasonable steps to work with Yellow to reach a solution, or acting with the urgency the situation demands, the Union continues to choose heated rhetoric over reason and remains entrenched in its irrational and indefensible position.”