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Teamsters Secure Settlement With Yellow Estate Despite WARN Act Liability Loss

The International Brotherhood of Teamsters reached a settlement in principle with Yellow Corp.'s bankrupt estate to recover partial WARN Act damages, according to a memo distributed Tuesday to local unions. Two separate courts had found the carrier not liable for failing to provide 60 days' advance notice before its July 2023 shutdown, yet the agreement grants $2 million in WARN Act claims. This represents five days of damages under federal law, with New Jersey-based employees receiving 30 days of damages. The deal includes $1.2 million in pending grievance claims and $1.8 million for unused personal holidays across New York, New Jersey, Pennsylvania, and Western regions. The estate will also distribute $71.5 million for paid time off and sick leave already approved. Affected employees face a $22,650 per-person cap ($15,150 for priority claims and $7,500 for additional benefit claims). Amounts exceeding the threshold will be paid at 20%. The Teamsters leadership prioritized full payment on contract claims and partial recovery on WARN Act claims over years of uncertain litigation. The settlement requires federal bankruptcy court approval in Delaware, with payments expected within months of confirmation.