Verizon Reaches Tentative Contracts with Unions; Workers to Return to Work

Verizon Communications

Verizon Communications (NYSE:VZ) announced that its striking wireline workers will go back to work on June 1. The company reached tentative agreements with two major unions representing approximately 36,000 employees.

The company conceded some of the major issues of disagreement such as proposals to reduce pensions and greater flexibility to transfer workers to geographic areas and outsource work.

“The new contracts will help ensure that Verizon employees continue to receive solid wages and excellent healthcare and retirement benefits.  They also include key changes sought by the company to better position our wireline business for success in the digital world,” said Marc Reed, chief administrative officer at Verizon, in a statement.

Verizon reached the tentative agreements with the Communications Workers of America (CWA) and the International Brotherhood of Electrical Workers (IBEW).

CWA president Chris Shelton commented, “This contract is a victory for working families across the country and an affirmation of the power of working people.”

Key changes better position Verizon’s wireline business

According to the company, the new contract with the unions allowed it to achieve cost savings in healthcare and other areas. Verizon said it will be able to make design changes in healthcare plans, adopt Medicare Advantage plan for retirees, maintain limits on post- retirement healthcare costs, and freeze the mortality table for lump sum pensions using the GATT rate.

Additionally, the agreements provide the company with greater flexibility in call sharing to better serve customers and the ability to offer special buyout incentives to employees.

Reed said, “This will allow our business to be more flexible and competitive and will help achieve greater efficiencies as we operate in the ever changing and dynamic digital marketplace.”

Verizon workers will receive wage increase

The employees of Verizon covered by the contracts will receive a wage increase of 10.5% during the duration of the agreements, which is set to expire on August 3, 2019.

The company said it will also hire additional associates during the term of the contract as part of its effort to accelerate the growth of its wireline broadband. “We’re especially proud of our commitment to 1,400 new hires – high quality and well-paying American jobs,” said Reed.

Verizon deployed thousands of non-union workers and contractors during the nearly six weeks strike to ensure that customers continue to receive services.

According to Reed, “We are incredibly proud of and grateful for the way our employees on special assignment stepped up to the plate to ensure that our customers were able to connect wherever and whenever they needed. We know strikes are challenging for employees on both sides of the picket line.  I’m pleased that all of our employees will be back at their regular jobs this week, working hard to serve our customers.”