Verizon Reaches Deal With Labor Unions, Averts Possible Strike
NEW YORK, NY [DJ] — Verizon Communications Inc. (VZ) reached an agreement on a new contract covering 65,000 workers Sunday, averting a potentially crippling strike.
The New York telecommunications provider and the Communications Workers of America union, which represents 50,000 workers, struck an agreement after negotiating intensely over the last few weeks, according to a statement from the union. The new contract extends coverage to MCI workers at Verizon Business and converts temporary jobs to permanent ones.
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“This is a breakthrough agreement in many ways,” said CWA President Larry Cohen. “It creates new union jobs including major growth areas like FiOS; it takes a big step forward on health care and it brings hundreds of Verizon Business employees the union rights they deserve.”
The agreement is expected to create 2,500 new union jobs, the CWA said. It also calls for wage increases totaling 10.9% compounded over the three-year term.
The settlement calls for wage increases totaling 10.87% compounded over the three-year contract term.
The agreement addresses many of the key issues. Workers balked at the cuts in health care benefits. Verizon proposes to require employees to pay some of the premium costs, while seeking a reduction in retiree insurance benefits. The union has complained about the waning job security, as the move to outsource more jobs reduces the power that the unions hold.
The last contract was originally set to expire on 12:01 a.m. EDT, but both sides agreed to delay the strike because of the progress made over key issues.
Over the past few weeks, Verizon workers staged protests throughout its territories in the Northeast states, including a large demonstration of several thousand red-adorned workers flooding the streets around the company’s headquarters in downtown Manhattan.
The labor-contract discussions, which involve CWA and the International Brotherhood of Electrical Workers, affect workers in Verizon’s landline division who are located in Northeastern and Mid-Atlantic states. They represent about 25% of the company’s revenue, a spokesman said.
A strike would have meant a loss of nearly a third of its work force. Verizon has 230,000 employees nationwide.
It would have been particularly ill-timed for the company, which recently began rolling out its FiOS TV service in its hometown of New York City. The cable companies are already staging a response to their new competitors, and Verizon couldn’t afford to stumble out of the gate in such a lucrative market.
Verizon employees last staged a strike in 2000. Workers stayed off the job for 18 days.
Verizon was not immediately available for comment.
