Unions representing 45,000 Verizon workers announced tentative new contracts on Wednesday that call for an 8 percent pay raise over four years while requiring workers to pay more for health coverage.
The contracts, covering workers from Maine to Virginia in Verizon's landlines division, come after 16 months of tense negotiations that included a two-week strike a year ago to protest the company's demands for concessions. A ratification vote is expected in the next month.
At a time when many unions are facing demands for pay and pension freezes, Verizon's main unions — the Communications Workers of America and the International Brotherhood of Electrical Workers — were able to preserve the current pension plan for existing workers.
But the unions did agree that future hires covered by the contracts would no longer receive traditional pensions and would instead have 401(k) accounts with a substantial company match.
The agreements, effective Aug. 1, 2011, to Aug. 1, 2015, include an $800 ratification bonus for those covered: field technicians, call center workers and cable installers.
Larry Cohen, president of the communications workers, criticized what he said was Verizon's hard-line approach, coming when the company had $10.2 billion in net income in 2011 on revenue of $110 billion.
Mr. Cohen said that while some unions have lost ground in concessionary contracts, "we've maintained our living standards in this 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."
The contracts cover workers in Verizon's traditional landlines operation and its new FiOS Internet and cable operations, but not workers at Verizon Wireless, the highly profitable cellphone joint venture that is largely nonunion and in which Verizon Communications is the majority shareholder.
Verizon originally pushed for a pension freeze for current workers, significantly higher employee contributions for health coverage, an end to all job security provisions and freedom to do as much outsourcing as it wanted.
As part of the deal, union officials said, the company will maintain the same level of health coverage and the workers will pay 20 percent of their overall health coverage costs, roughly double the old percentage. That provision is expected to increase out-of-pocket health care costs for family coverage by more than $1,000 a year.
Verizon has repeatedly argued that it needed numerous concessions as a way to reduce costs in its landline business because that division's consumer base and profit margins have shrunk over the last 10 years. Many customers have dropped fixed-line phones and turned to competing options like mobile phones, cable and Internet calling.
In defending the demand for givebacks, Verizon's chief executive, Lowell C. McAdam, wrote in a letter to employees last year, "The existing contract provisions, negotiated initially when Verizon was under far less competitive pressure, are not in line with the economic realities of business today."
Union leaders said the tentative settlement enabled them to preserve most job security protections and still limit some outsourcing, although some union members could be transferred into different Verizon jobs.
In a joint news release, the two unions said, "The tentative contracts meet the unions' goal of maintaining the standard of living and employment security of Verizon members over the next three years and reaffirm the fact that workers' bargaining rights are necessary to maintain the middle class in America."
Union officials said the raises would total $5,500 over the life of the four-year contracts. They said the typical Verizon union member earns $70,000 a year before overtime.
For future hires under the tentative agreements, Verizon would provide a dollar-for-dollar match in 401(k) contributions up to the first 6 percent of pay, and then, depending on the company's performance, it might add as much as 3 percent more in profit-sharing. Union officials said Verizon also agreed to reinstate 37 workers it had fired after accusing them of misconduct during the 2011 strike.
The two unions called their members back after two weeks of striking even though there was no agreement partly because union leaders saw how dug in Verizon had become and partly because they said Verizon had finally agreed to focus on the major issues in the negotiations.
Under the settlement, there is no raise for the first year of the contract, which has already passed, a 2.25 percent raise in the second year, 2.75 percent in the third year and 3 percent in the fourth year.
The two unions cited Gov. Andrew Cuomo of New York and George Cohen, director of the Federal Mediation and Conciliation Service, for their work over the last two months in helping to reach the deal.
By ISMAIL KHAN and DECLAN WALSH 20 Sep, 2012
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Source: http://www.nytimes.com/2012/09/20/business/verizon-workers-reach-4-year-tentative-pacts.html?partner=rss&emc=rss
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