Unions, Verizon Tentatively Agree on New Contract
September 20, 2012 9:04 am
After a bitterly contested 16-month labor dispute, unions repping Verizon workers have finally come to a tentative agreement on a four year contract with the telecom giant. The unions representing Verizon workers, the Communication Workers of America (CWA), and the International Brotherhood of Electrical Workers (IBEW), view the proposed terms as a partial victory — perhaps the best that could be expected, but not great.
The deal provides for eight percent in raises over the four year contract, and preserves pension plans for current employees. New hires will have pensions replaced with 401(k) accounts, and all employees will be forced to bear increased healthcare contributions. Notably, the agreement provides for the reinstatement of 37 workers who were fired for actions related to a 6,000 worker strike last August.
Though Verizon claimed that the provisions of the old contract were not realistic in light of today’s economic realities, the company had 2.4 billion in net income last year and CEO Lowell McAdam tripled his yearly earnings, making 23.1 million.
Larry Cohen, CWA President, spoke to the New York Times on the labor dispute and new contract:
Because of what’s going on in America, every employer, regardless of its financial wherewithal, believes it’s obligated to cut the costs of front-line employees,” Mr. Cohen said. “But we held our own. This is an incredibly profitable company, and the reality of today in America is if you hold your own, that’s a victory.
Verizon’s original demands — which led to a massive strike — were for a pension freeze, enormous worker healthcare contributions and the freedom to outsource as the company saw fit. The new contract preserves some of the job security language that existed in the previous contract, but some workers may still be transferred. In addition, the contract will only apply to workers in the landline and FIOS cable/internet divisions, but will not apply to Verizon’s growing wireless division workers.
Verizon’s givebacks to unions emphasize the profit motive at the heart of its hardline stance toward unions and workers over the last 16 months. While the communication giant could claim a loss of customers in the landline division, the company still boasts a robust bottom line and holdings. As we’ve seen before, the “contract out-of-line with current economic realities” language is routinely trotted out by profitable companies attempting to cut back on labor costs (see Caterpillar). The new contract will increase worker healthcare costs by over $1,000 yearly, and pensions will eventually become antiquated as new workers are hired.
Regardless, with the aggressive stance that Verizon has taken, the union’s persistence and ability to salvage a halfway decent contract is admirable.
Image from here