A federal appeals court has reinstated Yellow Corp.’s $137 million lawsuit against the International Brotherhood of Teamsters, allowing the former less-than-truckload carrier to pursue its breach-of-contract case. Yellow claims the union blocked a restructuring plan crucial for its survival, leading to its closure and leaving 30,000 people unemployed.

Yellow sued the union in June 2023 for blocking a proposed change of operations that would have allowed the company to merge its LTL operating companies, consolidate terminals, and alter work rules. The union’s refusal to support Phase 2 of the restructuring plan was blamed for Yellow’s “death spiral” by the company.

The lawsuit alleged that Teamsters general president Sean O’Brien used the blockade to extract wage increases and let Yellow fail as a show of strength ahead of labor negotiations with larger companies like UPS. The union denied these claims, stating that the proposed changes in Phase 2 violated the collective bargaining agreement.

The U.S. Court of Appeals for the Tenth Circuit ruled Wednesday that the district court erred in dismissing Yellow’s lawsuit and denied its request to amend the complaint. The appeals court decision was based on the principle of repudiation, exempting Yellow from exhausting grievance procedures due to the union’s refusal to participate in negotiations.

Yellow Corp. closed its doors on July 30, 2023, a month after filing the lawsuit against the Teamsters, resulting in 30,000 job losses. The union maintains that Yellow used them as a scapegoat for its demise and violated the collective bargaining agreement with the proposed changes in Phase 2 of the restructuring plan.

Read more at Yahoo Finance: Yellow’s $137M-plus lawsuit against Teamsters revived