Yellow, Teamsters reach WARN Act deal: $17.2 million for five days' damages

Former Yellow Corp. Teamsters are in line for some WARN Act money after all — even though two separate courts found the company was not liable for failing to give 60 days' advance notice ahead of its July 2023 shutdown, according to FreightWaves on Oct. 7. A Tuesday memo from a Teamsters director to Yellow local unions said the union reached a settlement in principle with the bankrupt estate that includes approximately $17.2 million in WARN Act claims — the equivalent of five days of damages under the federal law, with employees covered by New Jersey's WARN Act receiving 30 days.

The deal also allows $1.2 million in grievance claims that were pending when the company shut down, and $1.8 million in unused personal-holiday claims for New York, New Jersey, Pennsylvania, and Western Teamsters under their contracts. The memo reiterated a prior agreement under which the estate will pay $71.5 million in employee claims for paid time off, sick leave, and other contract claims — Teamsters are expected to receive full payment on PTO and sick-time claims, subject to a $22,650 per-person cap ($15,150 for priority claims plus $7,500 for additional benefit claims).

The settlement is not final yet: it still has to be signed by both parties and approved by the federal bankruptcy court in Delaware. But the memo said no further objections are expected, noting that Yellow's largest shareholder, MFN Partners, withdrew its objection to the bankruptcy plan confirmation. Payments are expected to be distributed within months of court approval, assuming no further appeals. Yellow terminated 3,500 nonunion employees on July 28, 2023, and 22,000 union employees two days later, then filed for bankruptcy on Aug. 6, 2023.