Verizon-Union Deal Averts Strike
Three-Year Pact Will Create Jobs; Ratification Awaits
By Amol Sharma
The Wall Street Journal
Monday, August 11, 2008

Verizon Communications Inc. reached a deal with two labor unions covering 65,000 workers, averting a potential strike that could have affected the telecom giant's installation and repair operations in Northeastern and Mid-Atlantic states.

Candice Johnson, a spokeswoman for Communications Workers of America, which represents 50,000 of the affected Verizon workers, said the two sides reached a three-year agreement "in principle" on Sunday after several weeks of negotiations.

CWA and the International Brotherhood of Electrical Workers, the other union covered by the agreement, will put the deal to their membership for ratification in coming weeks.

One of the final issues for the two sides to resolve was the unions' desire to organize more workers at Verizon, especially those in the Verizon Business unit. Under the tentative deal, Verizon will transfer more than 600 positions from that division to the Verizon land-line group. The company will also make 900 temporary workers in the landline unit regular full-time employees.

With those and other changes, CWA said the settlement would create 2,500 new union jobs in total. "This is a breakthrough agreement in many ways," CWA President Larry Cohen said.

Health-care costs were also a major issue. Verizon and the unions agreed to shift the way health costs are paid for future retirees who started working at the company after Aug. 2. Verizon agreed to continue paying 100% of premiums for active and already retired employees. Instead of a guarantee that the company will pay a certain percentage of retiree costs, the company will pay past workers a fixed dollar amount based on their years of service. Verizon says the provision, which affects employees hired after Aug. 2, will "mitigate increasing future retiree medical costs."

The unions had threatened to strike Monday at 12:01 a.m. They had agreed to extend talks last weekend after the previous five-year contract covering their workers had technically expired.

Verizon said in a statement that shifting to a shorter three-year contract would allow it "to closely align future agreements to marketplace changes in the fast-paced communications industry."

The unions involved in these contract discussions represent Verizon land-line employees who account for about 25% of the company's revenue. Verizon Wireless, a joint venture of Verizon Communications and Vodafone Group PLC, has very few unionized workers.

Write to Amol Sharma at amol.sharma@wsj.com

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