While the United Auto Workers (UAW) strike rages across the Midwest, another union is raising its voice for a different reason. Last month, trucking company Yellow (OTCMKTS:YELLQ) made headlines when it declared bankruptcy and laid off the majority of its workers. This resulted in it losing its spot on the Nasdaq and trading via an over-the-counter (OTC) exchange as YELLQ stock.
Shares have been in a race to the bottom since then, but now the company in focus for a different reason. The International Brotherhood of Teamsters union, which represents many truck drivers, is calling for the U.S. Senate to launch an investigation into Yellow’s bankruptcy proceedings, alleging nefarious activity on the part of its leaders.
What does this mean for this fallen stock and the company that appears to be on its way out? Let’s take a look at these claims and assess what investors should be expecting.
What’s Happening With YELLQ Stock
This hasn’t been a good day for YELLQ stock. As of this writing, it is down more than 8% for the day. It’s difficult to assess how much of this is due to the teamster’s claims, as the stock has been highly volatile lately. But that doesn’t mean investors shouldn’t be concerned with these allegations, as they call the conduct of Yellow’s leadership into question.
What specifically are the allegations against Yellow? According to Teamsters General Secretary-Treasurer Fred Zuckerman, the company has been treating workers poorly for years. He alleges that over 22,000 union workers spent 14 years conceding $5 billion worth of wages and benefits in order to help the company remain operational. Now these employees are all out of work following the bankruptcy filing.
The union’s General President Sean O’Brien has also addressed this topic, highlighting the problems with how Yellow’s management has conducted themselves. Per Freight Waves:
“Yellow approved millions in executive bonuses in June at the same exact time that they were voluntarily choosing not to pay millions in worker health care and pension benefits. Workers in this country need real protections against corporations who game the system. We need real reform now that puts workers first in this process.”
It should be noted that following the bankruptcy news, many of the company’s top executives began offloading shares of YELLQ stock. This includes its CEO and chief restructuring officer, leaders who would have helped oversee the bankruptcy process. Zuckerman has accused the company’s leaders of “trying to fast track liquidation” when it should be taking steps to ensure that this type of action against workers doesn’t happen again.
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On the date of publication, Samuel O’Brient did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
