A month after a bankruptcy judge ruled Yellow Corp. failed to provide detailed enough notice to employees about their termination when the trucking company shut down in July 2024, two separate class-action lawsuits against the firm have been settled.
Two separate groups of claimants—approximately 3,200 non-union employees and a group of 482 mostly union workers—settled for undisclosed amounts. Of the non-union workers, 2,700 of them already signed severance agreements releasing Yellow from further liability.
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Across the combined lawsuits, the former workers had sought north of $240 million in claims.
The first of the suits was filed in August 2023, when an employee accused the defunct less-than-truckload (LTL) carrier of failing to provide advanced Worker Adjustment and Retraining Notification (WARN) Act notices to employees prior to their mass layoffs.
Yellow terminated most of its non-union workers on July 28, 2023, just two days before the company folded. When the company officially ceased operations, all the remaining workers and Teamsters-represented employees got the axe.
In total, nearly 30,000 workers were out of a job when Yellow filed for bankruptcy and closed up shop two summers ago, with 22,000 of them belonging to the Teamsters.
The LTL had maintained that it didn’t have enough time ahead of the shutdown to provide the usual 60 days’ notice as required under the WARN Act. However, the company said it fell under various exceptions that allowed the notice period to be shortened.
Judge Craig Goldblatt agreed that the exceptions were applicable to Yellow’s defense at the time, but that the form of notices given to both union and non-union employees “did not contain enough facts adequately to justify the reduced notice.”
The remaining 22,000 Teamsters members are awaiting to see if one of Yellow’s claimed exceptions, a “liquidating fiduciary” defense, will entitle them to claims.
Under that defense, Yellow says it was no longer a business enterprise by the time it provided the notices. However, the trucking company didn’t fit this designation until completing its last shipment on July 30—the day the company ceased operations. If Judge Goldblatt determines the notices were given before the last delivery was completed, the Teamsters would gain access to the claims.
At the trial, Yellow could still see a reduction in some class-action claims on the basis that the trucking company acted in good faith throughout the issuing of the WARN Act notices.
The three-day trial is expected to close Thursday.
Yellow sells off four more terminals
The settlements came as more of Yellow’s terminals are being sold off bit by bit. Four properties are being acquired for a combined $56.5 million by trucking companies R+L Carriers and Central Transport.
Central Transport, which is headquartered in Warren, Mich., is scooping up one owned and two leased terminals for $54.5 million. The owned facility is a 198-door site in Memphis, Tenn., while the two California-based leased service centers are a 165-door location in Fontana and an 87-door terminal in Gardena.
Wilmington, Ohio-based R+L Carriers is acquiring one owned 117-door terminal in Jackson, Miss. for $12 million through its real estate affiliate, Ramar Land Corporation.
R+L and Central are among various trucking companies that had previously bought terminals from Yellow. Just last month, R+L acquired one 51-acre, 304-door owned terminal for $50 million, coinciding with Estes Express Lines purchase of 11 total terminals for $142.5 million.
In total, R+L Carriers has entered agreements with Yellow to purchase 13 terminals for $282.5 million since the auction process began in late 2023.
Crown Enterprises, Central Transport’s real estate affiliate, acquired 11 properties for $92.7 million from Yellow since its August 2023 bankruptcy declaration.
Across the board, Yellow has divested more than $2.2 billion in real estate, including 140 owned terminals and 29 leased facilities. The company still has not sold 37 owned terminals and 59 leased properties.
The sale process calls for all bids to be entered by Friday, with Feb. 10-12 as the auction period if needed.
The terminal sale and the class action settlement aren’t the only matters Yellow’s estate is still litigating in Delaware bankruptcy court.
Yellow is still battling 11 of its pension funds over the settlement of roughly $6.5 billion in claims. That deal is now unlikely before February at the earliest, since arguments related to the funds’ claims are set to take place at a Jan. 28 hearing.
