Verizon workers ratify new contract

The CWA and IBEW on October 19 announced that members on the East Coast from Virginia to Maine ratified the tentative agreement that the unions reached with Verizon in September.

“The ratification vote shows that our members listened to the union’s leadership when we told them that this was the best contract we could negotiate with Verizon at this point in time,” said Bill Huber, president and business manager of IBEW Local 827 in New Jersey.  “They understood that we were facing a perfect storm of negative economic circumstances and that although this was not the best contract we had hoped to achieve, it was one that will allow us to live to continue to fight for our members and the consumers they serve.”

Neither union released any details about the ratification vote, but several CWA locals, including one of the union’s largest, Local 1101 in New York City, rejected the new contract.

Nevertheless, the contract becomes effective on October 21 and stays in effect until August 2015.

When negotiations began in June 2011, Verizon demanded a long list of concessions to bring the pay, benefits, and working conditions of its unionized Wireline workers into line with those of its non-union Wireless workers

Among other things, the company sought to freeze pensions and eliminate them for new hires, eliminate regular pay raises, reduce sick days, eliminate job security and other job protections, eliminate shift pay differentials, eliminate double-time pay, cut disability pay in half, and substantially increase employee health care costs.

The tentative agreement held the line against many of these concessions. It includes an 8 percent pay raise paid in annual increments over three years, preserves the pension benefit for current employees,  preserves the no-layoff, no forced transfer, and no downgrade language of the previous contract, preserves shift and weekend pay differentials, increases company health care funding for retirees, and restricts the company’s ability to move work outside the region.

The new contract also returns to work, 37 of the 41 workers who Verizon fired because of their strike activity; although it’s not clear whether the returning workers will receive back pay.

The new contract, however, increases out of pocket health care expenses such as premium payments, co-pays, and deductibles. Over the next three years, premiums for the PPO plan increase from $0 a month to $55 a month for individuals and $110 for families; for the HMO plan, premiums increase from $0 a month to $82.50 a month for indivuduals and $165 a month for families.

Tobacco users will pay an extra $50 a month, and those who don’t complete a health assessment risk will pay an extra $100.

For the PPO, deductibles increase over the next three years from $250 a year for individuals and $625 for families to $475 for individuals and $1187.50 for families

The maximum that a worker pays for out of pocket medical expenses also increases at about the same rate as the deductible increases.

In a letter to members urging them to  accept the tentative agreement, CWA District 1 Vice-President Chris Shelton told members that the union agreed to health care cost increases in order to win concessions from the company on other issues such as preserving pensions for current employees, job security, retiree health care, and disability benefits.

In addition to agreeing to higher health care expenses, the unions also agreed to eliminate pensions for new hires, who will now be diverted into a 401(k) savings plan instead.

Shelton said that the union didn’t want to create a two-tiered pension system, but that it would have taken a strike in order to preserve the benefit. “Ask yourself, how long would you personally be willing to stay on the street to guarantee a defined benefit pension for workers who are not yet hired,” said Shelton in his letter.”

But Local 1101 President Keith Purce urged members to reject the deal.

“We don’t believe we should settle for a concessionary contract without a fight,” Purce told members in a message posted on the local’s website.

Other Local 1101 members said that they also opposed the contract because of the concessions that the union made.

“New hires already aren’t covered by the job security protection that pre-2003 hires have,” said Pam Galpern, a Local 1101 member, to Labor Notes. “And they don’t have the same retiree health benefits as those hired before 2008, and now they won’t have a pension. (Verizon is) incrementally trying to dismantle the contract we have.”

Shelton described the negotiations as the toughest he has seen in the 44 years that he has been a CWA member.

The reason that the negotiations were so tough is that corporate power is stronger than it has been since the 1930s. At the same time, union membership at companies such as Verizon has declined. Only 7 percent of the private sector workforce is organized, and the CWA has lost half of its membership at Verizon.

Just as important is the fact that Verizon is retreating from the Wireline business and focusing more on its non-union Wireless business. The company’s CEO Lowell McAdams told investors that he envisions that the company will some day abandon much of its Wireline infrastructure, which provides jobs for most union members.

Whether the unions at Verizon will be able to stop future concessions will depend on the unions’ ability to organize workers at Verizon Wireless.

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2 thoughts on “Verizon workers ratify new contract

  1. “In addition to agreeing to higher health care expenses, the unions also agreed to eliminate pensions for new hires, who will now be diverted into a 401(k) savings plan instead.”
    “CWA has lost half of its membership at Verizon.”

    This is just so depressing. Ft. Worth Lockheed workers recently had a lengthy strike but ended up settling for a 2-tier pension plan with new employees getting a 401K. How long can public employees hold out? How long before we have no private sector companies left that have regular pensions for all employees?

  2. Oh, I think in the 2nd-to-the-last paragraph, line 2, you meant to refer to “non-union Wireless business.”

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