A federal court in Kansas has dismissed a $137 million breach-of-contract lawsuit filed by defunct Yellow Corp. against the Teamsters union and its negotiating arm. The court ruled that Yellow failed to exhaust the grievance process outlined in its collective bargaining agreement with the union. The lawsuit alleged that the union breached the agreement by not approving operational changes, which Yellow claimed were necessary for its survival. The union rejected the proposed changes, citing previous concessions made by employees. Yellow argued that it wasn’t required to go through the grievance process due to the nature of its claims, but the court disagreed. Additionally, the court denied Yellow’s request to amend its pleading and move the case to the Delaware bankruptcy court overseeing its Chapter 11 liquidation. The Teamsters union criticized the lawsuit as frivolous, while a ruling is expected soon on a venue for hearing withdrawal liability claims from pension funds. Yellow is seeking to keep the matter before the bankruptcy court, while the pension funds prefer arbitration.

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