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Contract heads to a vote
What's wrong with the deal at Verizon

By Michael Ware and Lee Sustar | September 12, 2003 | Page 12

TELEPHONE GIANT Verizon and unions representing 78,000 workers reached a tentative five-year deal after union members worked without a contract for a month. Given Verizon's extensive strike preparations and aggressive bargaining stance, the Communications Workers of America (CWA) and the International Brotherhood of Electrical Workers (IBEW) are calling the agreement a "great victory" for having avoided immediate layoffs and health care premium co-payments.

But according to the limited information released by the unions, the deal doesn't contain a single gain for workers. In fact, it opens the door to a two-tier workforce and a virtual in-house temp agency--which could lead to disintegrating union power on the job.

Yet even though contract details were not made available, the unions are pressing ahead with local contract ratification votes by mid-September. The rush for ratification begs the question--why are union leaders in such a hurry?

On the surface, the agreement seems to have done the impossible--beat back the company's most aggressive demands without a strike, even though management had a scab operation ready. The unions claim that their "inside" strategy worked better than expected, pressuring the company to settle while avoiding lost wages from a strike.

But union members should be skeptical of these claims. The seemingly small concessions in the contract contain time bombs that open the door to layoffs, dramatically lower pay and reduced benefits in the future.

Most worrisome is the loss of job security for new hires. By removing the ban on layoffs, management may be able to hire summer workers, lay them off and then rehire them without bridging time--resulting in workers who never accrue seniority and have limited benefits.

With Verizon planning to spend $40 billion to launch a new fiber-optic network, this will likely create a growing division between a group of skilled workers and lower-paid technicians. In fact, according to the New York Times, Verizon plans to hire "several thousand" more workers in the next few years.

That's why management is offering a $10,000 payout for anyone who leaves during the life of the contract--with a sizeable pension increase for those who go by the end of the year. No doubt supervisors will use the harsh Service Excellence Plan disciplinary procedure--imposed during the last contract--to harass workers into quitting before they are fired.

Aside from a 3 percent signing bonus, wage increases work out to 1.6 percent a year--below the rate of inflation--compared to the 4 percent yearly average in the last contract. If the last contract's pay increases were continued for the five years of the new contract, workers would end up with about $8,500 more in annual salary than what they will get under the proposed deal.

The CWA points out that under the agreement, annual negotiations will be held each April on wages and working conditions. Just what these meetings will accomplish is far from clear--and since the contract bans strikes or lockouts, the union will have no leverage to fight for gains.

In addition, the deal includes increases in health care costs--with workers required to pay a $480-a-year surcharge for spouses covered by their employers' medical plans. It isn't clear how the proposed PPO health plan would be "integrated" into traditional fee-for-service coverage--and what limitations that could mean for coverage. The same questions surround prescription drug coverage, with new limits imposed on payments for brand-name medications.

And the proposed deal reportedly no longer includes the neutrality clause for the CWA's efforts to organize Verizon Wireless--something negotiated in the last contract, but never enforced. Many Verizon workers believe that this deal is the best they could get, given the lousy economy. But Verizon leads the telecommunications industry--and made a massive $4.1 billion in profits last year alone.

The unions should be making gains, not giving back. In recent months, labor leaders across the U.S. have folded rather than fight in the face of demands for concessions. Likewise, despite successful strikes at Verizon in 1998 and 2000, CWA and IBEW officials did practically nothing to prepare for a walkout this year, even as the company put together a massive scabbing operation.

A showdown might have been avoided today, but it's bound to happen sooner or later. It's better for the unions to fight Verizon while they're strong today, rather than weaker tomorrow. A "no" vote on the proposed contract is the place to start.

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