Verizon averts workers’ strike, Qwest Communications still undecided

Verizon Communications and union workers agreed on a new labour contract on Sunday, avoiding a strike that could have delayed the rollout of the phone company's FiOS Internet and video service.

Verizon said it has reached tentative agreements on three-year deal with union leaders that will increase the wages of 65,000 workers by 10.87 per cent compounded over a three-year contract.

The deal was reached on Sunday night before a 12:01 a.m. deadline imposed by the unions Communications Workers of American (CWA) and the International Brotherhood of Electrical Workers (IBEW). CWA and IBEW threatened to strike if a deal was not reached by midnight.

Earlier talks had failed last week on the unions' concern that Verizon planned to require employees to contribute towards health-care coverage costs and the company's increasing subcontracting of jobs to non-unionized workers.

Verizon human resources chief Marc Reed said the new three-year contracts, will replace five-year agreements, giving the company more flexibility. Under the deal Verizon will also transfer more than 600 positions in the business division to the landline group. It will also make 900 temporary workers in the landline unit regular employees.

"This is a breakthrough agreement in many ways," said CWA President Larry Cohen. The unions will now put the deal to their membership for their ratification.

Verizon has about 103,000 workers in its telecom unit that provides residential and small business telephone, broadband and video services. The last time Verizon workers walked out was in 2000 when about 85,000 workers went on strike for about three weeks.

Investors were watching closely as a walkout would have delayed the expansion of fiber optic service FiOS, Verizon's effort to compete with Time Warner Cable and Cablevision by offering television along with high-speed Internet and voice services.

Verizon launched its FiOS TV service in New York City on 28 July. The network expansion, for which Verizon is spending $22.9 billion from 2004 through 2010, is labour intensive.

The tentative agreement preserves fully paid health-care premiums for all active and retired employees, while future hires will have a defined contribution formula for retirement health care, with the amount of Verizon's contributions subject to negotiation in each subsequent contract. The agreement will also lead to the creation of 2,500 union jobs.

In a similar development, union workers for Qwest Communications International Inc. pledging allegiance to CWA and IBEW voted in favour of calling a strike if their collective bargaining with the company takes an unsatisfactory turn.

The union is negotiating on behalf of 20,000 workers in 13 states, the group said in a statement. It represents workers in Arizona, Colorado, Iowa, Idaho, Minnesota, Nebraska, New Mexico, North Dakota, Oregon, South Dakota, Utah, Washington and Wyoming.

The union is concerned about health care and retirement security, quality jobs and wage increases, the statement said. Ninety-three per cent of the vote favoured calling a strike.

''Strike authorisation is an expected part of bargaining,'' said Qwest spokesman Bob Toevs. ''We continue to bargain in good faith.''

The contracts between Qwest, the CWA and the IBEW Workers are scheduled to expire on 16 August, a week before delegates, party leaders and corporate VIPs arrive in Denver for the Democratic Party National Convention and though neither side acknowledges that as added pressures, it's difficult to imagine Qwest wanting a union walkout coinciding with the high-profile political convention in its hometown, one which Qwest is helping sponsor.