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Federal Court Upholds Yellow's WARN Act Exemption in Union Layoff Case

Yellow Corp. is not liable under federal law for failing to provide 60 days' notice before laying off 22,000 union employees in 2023, a federal appellate court ruled Monday. The court affirmed a bankruptcy court decision that the defunct less-than-truckload carrier qualified as a "faltering company" exempt from Worker Adjustment and Retraining Notification Act requirements. The company terminated 3,500 nonunion workers on July 28, 2023, followed by union staff two days later. Yellow had argued its collapse accelerated after the Teamsters union issued a strike notice over missed benefits contributions. The strike was called off hours before the planned work stoppage, but Yellow said customers had already shifted freight to competitors, causing irreversible damage. The court determined Yellow's notice was sufficient to invoke the faltering company exception. Potential payouts to New Jersey employees were not quantified in the decision.