Verizon and Unions Hold the Line as Strike Continues

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By Tyrone Richardson

April 29 — Although Verizon Communications Inc. made a “last, best and final” contract offer April 28, the move isn't likely to end the strike of approximately 39,000 workers any time soon, industry analysts told Bloomberg BNA.

There could be a long road ahead before a collective bargaining agreement is reached and the union-represented workers return to work, according to Jeff Kagan, an independent telecommunications analyst.

“It appears as though current management is going to stick to their guns and not be giving in this time,” Kagan told Bloomberg BNA April 26. “Things could get ugly.” The two sides met April 29, but there were no proposal changes as of the early evening, union officials said.

Members of the Communications Workers of America and the International Brotherhood of Electrical Workers, who include customer service representatives and FiOS technicians, April 13 went on strike at Verizon offices and equipment facilities in the Northeast and mid-Atlantic regions (71 DLR A-14, 4/13/16).

The strike is the latest chapter of what has been more than 10 months of contentious labor contract talks (148 DLR A-11, 8/3/15). Verizon and CWA-IBEW have a long history of difficult contract talks, which have included strikes or threats to strike (155 DLR A-17, 8/12/15).

The two sides met April 28, the first time since a brief meeting April 15 (82 DLR A-12, 4/28/16). During the more than three hours of talks that day, Verizon presented a “final” contract offer that would increase pay raises and offer layoff protections, but failed to address other demands, according to a statement from the unions provided to Bloomberg BNA.

“Sadly Verizon has refused to compromise on its most extreme demands, like its call to further outsource American jobs overseas, while rejecting our offer to save the company millions in health-care spending without gouging retirees,” Lonnie R. Stephenson, the president of IBEW International, said in a April 29 statement. “The company’s final offer doesn’t address those concerns and will do nothing to keep good jobs here in America.”

Growing Tensions

Union-represented Verizon workers initially remained on the job after 27 collective bargaining agreements in nine Eastern states and the District of Columbia expired Aug. 1, 2015 (148 DLR A-11, 8/3/15).

Verizon and union officials have been trading a series of allegations against each other. The most recent came April 25 when Verizon filed a complaint with the New York State Supreme Court, claiming the unions' aggressive strike tactics are damaging the company.

The allegations came days after the CWA filed April 13 an unfair labor practice charge with the National Labor Relations Board, alleging Verizon has “failed and refused to bargain in good faith with the union as the collective bargaining representative of its employees.”

The unions also are urging some state public utility regulators to investigate Verizon's alleged neglect of its infrastructure (220 DLR A-9, 11/16/15).

On April 12, the day before the strike, Verizon announced it would be open to assistance from the Federal Mediation and Conciliation Service to help advert a strike. Union officials rebuffed the company's statement, saying the “question of federal mediation is a distraction to the real problem: Verizon's corporate greed” (70 DLR A-11, 4/12/16) .

The CWA represents about 29,000 workers and the IBEW represents 10,000. Verizon officials have challenged the unions' math, saying the total units consist of 36,000 company employees.

The company said April 28 “more than 1,000” union-represented employees have crossed picket lines, and the strike has had a “minimal impact” on Verizon's operations.

Verizon: ‘Better Offer Would Be Hard to Find.'

The company April 28 presented its “final” contract offer, which included some job-security language if the union agrees on provisions regarding layoffs, buyouts and reassignments.

The offer also included increased matching of 401(k) retirement contributions and increased contributions to pension plans but also increased contributions from employees for their health care plans.

Marc Reed, Verizon’s chief administrative officer, said “a better offer would be hard to find,” adding that the company's goal remains to reach a contract deal that is fair to employees and keeps the company competitive.

“Verizon has always offered excellent jobs with outstanding compensation and benefit packages, and with this very competitive contract offer that will continue,” Reed said. “The ball is now in the unions’ court to do what’s right for our employees.”

Union leaders criticized the deal, saying the offer stopped short of addressing all their concerns.

“Executives refused to back off of callous proposals that would hurt working families and destroy middle class jobs, including shipping jobs overseas and outsourcing work,” according to an April 28 statement. “The company also failed to budge on the issues facing Verizon Wireless workers.”

No Immediate End to Strike?

Kagan said Verizon's management is determined to slash costs in its landline business, which has been gradually losing customers to wireless technologies.

“So in order for them to remain competitive they have to keep their costs low. It's not like the old days when they had no competition,” Kagan said. “Today if their prices are higher than the competitors the customers will simply leave.”

The unions have told Bloomberg BNA they are seeking contract provisions such as limiting transfers of workers to other regions, protection for retiree health care benefits and increasing pension benefits.

Verizon is sticking to its demands, mounting resources to assure it can weather the stalemate, Tom Juravich, a professor at the University of Massachusetts at Amherst Labor Relations and Research Center, told Bloomberg BNA April 26.

“The company is working with supervisors and contractors and it's going to keep using that unless they get some technical pressure like a major storm or a software glitch, which will then tip the balance of power to the union,” he said.

Kate Bronfenbrenner, a labor professor at Cornell University, told Bloomberg BNA April 26 that the strike is also “an emotional one.” That's partly because workers sacrificed time with their families to work long hours repairing damaged operations caused by Hurricane Sandy, and now are angry that Verizon is going back on its pledge to invest in its copper lines, she said.

“That’s a broken promise and trust and these workers sacrificed a lot during that time,” Bronfenbrenner said. She added that other workplace issues such as forced transfers will fuel workers' continued picketing.

“They’re willing to hold on and one day longer than the employer,” Bronfenbrenner said. “One of the things employers do is underestimate the emotional power and resilience of workers on these issue because these are the things that matter with fairness and justice.”

Cuts in wages and benefits “they may allow, but workplace fairness issues, they will stay out on strike for that,” she said.

Would Long-Term Strike Damage Company?

Company executives and observers have said there may be no immediate impact from the strike thus far, but that could change if the protests drag on for months.

Kagan cautioned that the longer the strike “drags on the more it will hurt Verizon in the long run.”

Company executives hinted at such a negative impact during a first quarter earnings conference call with investors April 21. Chief Financial Officer Fran Shammo said Verizon has budgeted for the cost of the labor disruption and doesn't expect the dispute to cut into earnings. He added that if the strike continues for an unspecified amount of time, that could put pressure on second-quarter earnings.

Verizon officials also acknowledged some delays regarding equipment installations for customers.

The strike could also tarnish the company's image, Juravich said. The throngs of picketers have created a political backdrop for Democratic presidential candidates Hillary Clinton and Bernie Sanders, who have pledged support for the workers and joined them on the picket lines.

Some company executives have also reached out to picketers, including Verizon CEO Lowell McAdam, who was photographed speaking with picketers, according to Verizon's website.

Return to 2011 Contract Talks

Extended contract talks have been common for Verizon and the unions representing the largest groups of employees.

The agreements that expired last Aug. 1 came after a contentious 15 months of bargaining that included a two-week work stoppage and assistance from the FMCS (203 DLR A-11, 10/19/12). The union leadership agreed to end that strike when Verizon agreed to extend expired contracts indefinitely and give the parties more time to resolve the issues (162 DLR A-9, 8/22/11).

The company appears to be less willing to make such accommodations during this round of contract negotiations, Kagan said.

That is partly because of some changes within the telecommunications market, and in Verizon's executive leadership since 2011.

“In 2011, Ivan Seidenberg was the CEO,” Kagan said. “He looked at the union differently. He tried to strike a balance between union needs and the company's needs.”

Mother Nature could have also helped nudge the talks in 2011, Kagan added, saying Hurricane Irene caused damage in East Coast coverage areas and created a repair backlog.

“The union workers must understand things in the marketplace change,” Kagan said. “I understand their point of view. If I was a union worker I would want what they want. However from the company's perspective, new competition and new technology means real changes must occur, otherwise Verizon could become uncompetitive and lose.”

String of Union-Telecom Negotiations

The Verizon strike also adds to a series of long contract negotiations involving telecommunications companies such as AT&T and FairPoint Communications.

Industry observers have told Bloomberg BNA that such extended talks are partly because of telecom companies seeking ways to cut costs amid industry changes, including competition from companies such as Dish Network, new regulations from the Federal Communications Commission and changes caused by the Affordable Care Act.

The four-month strike by about 1,750 workers at FairPoint, who are also represented by the CWA and IBEW, was the longest single work stoppage in the U.S. in 2014 and ended in February 2015 (35 DLR A-11, 2/23/15). The major disagreements involved proposals to outsource work, freeze pensions, and change retirement and health benefits.

CWA-represented workers at AT&T West are remaining on the job despite the April 9 expiration of their four-year CBA, union officials said. The talks for AT&T workers in California and Nevada comes on the heels of 24,000 AT&T employees in the Southeast region working about four months after expiration of a labor contract, before ratifying a new agreement (234 DLR A-10, 12/7/15).

The labor dispute with Verizon differs from the situations with other telecom companies because of the size of the bargaining units and the perceptions of corporate “attacks on middle-class workers,” said Michael Leroy, a professor at the School of Labor and Employment Relations at the University of Illinois.

LeRoy said the union “is hoping to capitalize” on the political situation in this presidential election year with candidates pushing for improved workplace rights like higher pay and pushing against corporate greed and attacks on middle-class workers.

“With this dispute, it comes down to public perception and if the company sees that” and will Verizon concede, LeRoy said.

To contact the reporter on this story: Tyrone Richardson in Washington at trichardson@bna.com

To contact the editor responsible for this story: Susan J. McGolrick at smcgolrick@bna.com

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