The pension fund's board of trustees on Monday voted on the actions after Yellow missed a $50 million payment to the Central States pension fund on July 15, according to a news release from the International Brotherhood of Teamsters.
Yellow Corp. had submitted a request in June to defer pension contributions for two months to be repaid with interest because of liquidity concerns.
"The company advised Central States Funds that it would defer payment of health and pension contributions for June (due July 15) and July (due August 15) to preserve liquidity as it worked to obtain meetings with the IBT as well as secure additional financing," a Yellow Corp. spokeswoman said in an email. "Two months' of deferrals to Central States would represent approximately $50 million dollars. Only the first of those two monthly payments has been deferred to date. The company intends to repay the funds with interest immediately upon securing additional financing and has asked the funds to discuss acceptable terms."
"Yellow has a responsibility and obligation to workers. Our members should not suffer because of management's incompetence and financial irresponsibility. This is a new low, even for a company as dysfunctional as Yellow," said Fred Zuckerman, general secretary-treasurer for the Teamsters in the IBT news release. "The Teamsters are working with our local unions, and we will continue to regularly update members as this situation unfolds."
The potential strike brings an ongoing conflict between the company and the Teamsters to a new level.
Before this latest development, Yellow Corp. filed a lawsuit against the Teamsters on June 27 in U.S. District Court in Topeka, Kan., alleging breach of contract in blocking restructuring efforts. In the filing, Yellow alleges the Teamsters' blocking of those restructuring efforts "have already caused plaintiffs over $137 million in damages. If not cured immediately, these breaches will also result in the liquidation of the company, the loss of 22,000 Teamsters jobs, higher transportation costs in a less competitive freight shipping market, and severe harm to the United States supply chain and economy, as well as wipe out all of the equity value of Yellow's shareholders, including the United States Treasury, Yellow's single largest shareholder."
As of Dec. 31, 2021, the Teamsters Central States, Southeast & Southwest Areas Pension Fund had $10.1 billion in assets, according to its most recent Form 5500 filing.
In December, President Joe Biden announced that the Pension Benefit Guaranty Corp. approved $35.8 billion in federal assistance for the pension fund under the Special Financial Assistance Program, which was created by the American Rescue Plan Act of 2021.