Negotiations between the large U.S.-based telcos and their wireline unions--the Communications Workers of America (CWA) and the International Brotherhood of Electrical Workers (IBEW)--continue to be a major storyline in the wireline side of telecom.
Verizon wireline union employees demonstrate during 2011 contract negotiations. (Source: CWA)
As the major telcos have been migrating towards IP-based services and their legacy wireline voice service revenues have declined, it has cut into revenues that would be used to pay for union health and retirement benefits.
At times, the negotiations between the telcos and unions have been acrimonious. Service providers are looking to cut costs by reducing pensions and asking for more contributions to health care, while union workers feel their employers are acting on corporate greed.
After asking for various concessions on work rules, pension and health care contributions, Verizon's (NYSE: VZ) wireline union workers staged a strike in August, 2011. More recently, AT&T West (NYSE: T) signed a tentative agreement with the CWA after union members said they decide on a day-to-day basis whether to strike.
Here's a summary of the progress that five of U.S. telcos have made with their unions:
AT&T: As the largest U.S. telco, AT&T has over the past year been negotiating the terms of union contracts that span its diverse territories. Just this week, AT&T West reached a tentative deal with CWA District 9, which covers more than 17,000 wireline employees in California and Nevada. It will be submitted to CWA members to be voted on in the next few days. The tentative deal with AT&T West is significant as it comes after the 18,000 workers and CWA leaders said last week they would decide on a day-to-day basis whether to strike when the two sides could not initially come to an agreement on a new contract.
Besides the West division, the service provider made continued progress with its union workers, ratifying new contracts with AT&T Midwest, AT&T Legacy and AT&T Southeast. Negotiations are continuing with AT&T East in Connecticut, covering 3,000 members of CWA Local 1298.
Meanwhile, IBEW System Council T-3 began negotiating a new contract representing 6,500 Illinois and northwestern Indiana workers.
- Verizon: In September 2012, Verizon reached tentative three-year contract agreements with the IBEW and the CWA. These agreements, however, were not easily completed. In August 2011, 45,000 union wireline workers went on strike for the first time since 2000 after the two sides failed to reach an agreement for a labor contract that had expired. Verizon is far from being out of the woods on the union front. Last month, members of CWA in Austin, Texas, voted down a tentative agreement that covers about 2,200 workers. The CWA bargaining team said they are meeting to review their next steps.
CenturyLink: While its integration of the Qwest Communications assets is continuing on pace, CenturyLink (NYSE: CTL) faces the possibility that CWA union members who work in 13 legacy Qwest Communications areas could go on strike if they can't come to terms on a new contract. The executive board of CWA District 7 has authorized the setting of a strike date for 13,000 CenturyLink CWA members. Although the CWA contract with CenturyLink expired in October, it has been extended while bargaining continues. Some of the issues that CWA members want resolved are contracting out and offshoring of work.
Frontier: Frontier Communications (Nasdaq: FTR) is in the process of negotiating new contracts with its union members represented by the CWA and the IBEW. In Illinois, IBEW Local Union 21 has agreed on a 1-year contract extension. The new contract includes general wage increases, health care and disability benefits.
- Hawaiian Telcom: Like Verizon, Hawaiian Telcom's (Nasdaq: HCOM) work to get a contract signed with its 700 union workers did not come easily. In December 2011, the IBEW rejected Hawaiian Telcom's previously updated collective bargaining agreement. At that time, it told the telco that it would file a legal challenge of the bargaining process. Later in June 2012, the National Labor Relations Board (NLRB) dismissed the IBEW Local Union 1357 unfair labor practices charge filed against Hawaiian Telcom. The new five-year contract, which is in effect from Jan. 1, 2013 through Dec. 31, 2017, was agreed to by both company and union leadership on Dec. 14.
Although these telcos have made progress in securing or reaching tentative agreements with their unions, it's clear that negotiations are far from over. In our new report we examine the timeline and union activities of these telcos.
Take a look at the progress service providers have made with both unions in in the following chart.