Tenth Circuit Reinstates Yellow’s $1.5 Billion Lawsuit Against Teamsters for Orchestrating the Company’s Collapse

Yellow Corporation, represented by Kasowitz, secured a major win in the U.S. Court of Appeals for the Tenth Circuit, which reinstated Yellow’s $1.5 billion lawsuit against the International Brotherhood of Teamsters for orchestrating and executing a deliberate campaign to destroy the company.
 
The Tenth Circuit panel reversed the U.S. District Court for the District of Kansas’ dismissal of Yellow’s suit, holding that the lower court erred by denying Yellow’s motion for leave to amend its complaint.  The Court held that Yellow’s “proposed amended complaint adequately pleaded that the Teamsters had repudiated the collective bargaining agreement’s grievance process,” which excused Yellow from any requirement that Yellow exhaust such procedures, and further held that Yellow’s “factual allegations supported [its] overarching theory that the Teamsters’ ultimate plan was to ‘stall the Phase 2 CHOPS, blindly decline all proposals by Yellow, and foment an illegal strike.’”
 
In its amended complaint, Yellow alleged that the Teamsters, directed by then newly elected President Sean O’Brien, intentionally and unlawfully obstructed Yellow’s critical change-of-operations initiative in violation of the collective bargaining agreement, with the aim of stonewalling Yellow’s restructuring and destroying its business.  This conduct, according to Yellow, drove the company into bankruptcy, destroyed 30,000 jobs, and caused the collapse of a century-old American enterprise.
 
The Court further ruled in Yellow’s favor by rejecting the Teamsters’ argument that the NLRB has primary jurisdiction over this contract dispute, which clears the way for Yellow to amend its complaint and move forward on remand on its more than $1.5 billion claim against the Teamsters.
  
The Kasowitz team representing Yellow Corporation is led by partner Marc E. Kasowitz and includes partner Ronald R. Rossi, who argued the appeal, counsel Maria Gorecki, and Special Counsel Léa Dartevelle Erhel.