Verizon union workers represented by the CWA and IBEW ‘overwhelmingly’ ratified a new 4-year pact set to run through August 2019
Verizon Communications and tens of thousands of union employees officially ended a tense stand-off following the official ratification of a new labor contract agreed to late last month. The new agreement, which covers Verizon wireline employees in the Northeast, is set to run through Aug. 3, 2019.
According to the Communications Workers of America and the International Brotherhood of Electrical Workers, union employees overwhelmingly ratified contract terms. Those terms include workers receiving a 10.5% wage increase over the four-year term of the deal, with Verizon committed to hiring approximately 1,300 new workers.
“The ratification of these hard-won contracts cements an incredible victory for the nearly 40,000 courageous workers who put everything on the line to protect the good jobs for their families and for all American families,” said Dennis Trainor, VP for CWA District 1.
“I want to congratulate everyone at Verizon who stuck together and worked so hard to get to this moment,” said IBEW International President Lonnie Stephenson.
The deal for the first time also included some Verizon Wireless employees, including 100 technicians in New York and retail store employees.
“The contract provides a first-ever grievance and arbitration procedure, protections against arbitrary discipline and firing and restrictions on the company’s ability to subcontract work,” noted CWA.
Verizon for its part said it gained the ability to offer special buyout incentives to employees and health care cost savings for current and retired workers under its pension plan.
“We’re pleased that our employees ratified these new agreements,” said Marc Reed, Verizon’s chief administrative officer. “The terms are good for our employees, good for our customers and good for our business. The company’s key objectives for this round of bargaining were in the areas of health care, post-retirement costs and workforce flexibility. These agreements achieve all of those objectives. The company will realize cost savings and cost avoidance through health care plan design changes, increased health care contributions, Medicare Advantage plans for our retirees, maintaining limits on post-retirement health care costs and freezing the mortality table for lump-sum pensions using the [General Agreement on Tariffs and Trade] rate. In addition, the agreements allow for greater flexibility in call sharing to better serve customers, and give us the ability to offer special buyout incentives to associates.”
Verizon earlier this month admitted the strike would hit financial results for the current second quarter, with that hit expected to stay on the books for the remainder of the year.
Verizon CFO Fran Shammo, speaking this week at a Bank of America Merrill Lynch conference, said the company will see an earnings impact of between 5 cents and 7 cents for Q2 related to the labor strike, with that financial impact set to also hit full-year results. Shammo explained the costs are coming from overtime paid to management employees, hiring contract workers to cover for striking workers and a decrease in new business installations. That decrease is expected to result in Verizon posting net losses across its FiOS broadband business for the quarter.
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