Yes, it says "Recycled Linen Yarn"
The "Darn Good Yarn" explains the process this way on their website.
"Ever wonder what happens to excess scraps of material when garments are made? Well, in Darn Good Yarn's case, we spature and turn them into yarn! This yarn is made from reclaimed linen material and is handspun and hand-dyed by a fair trade, family operated co-op in India. Each skein is 100g with 43 yards. Dry Clean Only (if you wash it you could possibly shrink the fabric!)

The site also features
other types of reclaimed/recycled yarns and fair trade as well.
See http://www.darngoodyarn.com/ for more information.
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