Verizon Workers Going Back to Work, Without Deal

Ferdinand Hernandez, left, a sales associate who works for Verizon in Newark, N.J., holds a sign as he and coworker Leyda Jimenez, center, a multilingual consultant, picket outside of a Verizon store, Monday, Aug. 8, 2011, in Newark, N.J. (AP2011)

NEW YORK -- Thousands of striking Verizon workers will return to work starting Monday night, though their contract dispute with the telecom company isn't over yet.

Both the company and the union say they have agreed to narrow the issues in dispute and have set up a process to negotiate a new contract. But the talks are likely to be contentious. The two sides still disagree on touchy subjects such as health care benefits, pensions, and work rules.

About 45,000 employees went on strike on Aug. 7, after their previous contract expired. They work in the company's landline division in nine states from Massachusetts to Virginia.

Verizon says that it needs to cut costs in the traditional landline phone business, which is in decline as more Americans switch to mobile phones. The company has proposed freezing its pension plan and switching union workers to its non-union health plan, which has higher costs for employees.

The unions counter that the landline business supports the growing wireless business and that Verizon, which earned about $3 billion in the first half of the year, can afford to maintain the benefits in the contract that expired on Aug. 6. They also say Verizon put too many proposals on the table.

Of the 45,000 striking workers, 35,000 are covered by the Communications Workers of America, while 10,000 are covered by the International Brotherhood of Electrical Workers.

Jim Spellane, a spokesman for the IBEW, said the strike occurred because Verizon "came in with an extreme set of proposals and never really moved off of them."

But after the 14-day strike, "I think they realized the unions are serious," he said. "It's in everybody's best interest to get back to work."

Verizon spokesman Richard Young said that many of the benefits and work rules were put in place when Verizon faced much less competition in its landline business. "The contracts are not reflective of today's marketplace," he said.

Spellane said that much of the traditional phone network helps support the faster-growing wireless business. And many of the technicians that went on strike install and maintain the company's new fiber optic network, FiOS, which provides Internet, video and phone services.

Verizon has 196,000 workers, with 135,000 of those non-union. The wireless division, which wasn't affected by the strike, is mostly non-union.

Nearly 30 percent of U.S. homes have dropped landline phone service and rely on mobile phones only, according to the National Center for Health Statistics.

Verizon Wireless added 1.3 million wireless customers in the April-June quarter, for a total of 89.7 million. That growth has been helped by the addition of Apple Inc.'s iPhone in February. The company owns 55 percent of Verizon Wireless, with Britain's Vodafone owning the rest.

Meanwhile, total voice connections, which measures FiOS digital voice connections in addition to traditional landlines, declined 7.9 percent to 25 million. But the company has seen increases of more than 20 percent in customers subscribing to both FiOS Internet and TV services over the past 12 months.

Candice Johnson, spokeswoman for the CWA, said Verizon is asking $20,000 per worker in annual concessions. The company has disputed that but hasn't offered its own figure.

Johnson said earlier this month that the union's best-paid Verizon workers get about $77,000 a year in New York. The company puts the figure at $91,000 and said benefits average $50,000.

"These are very important issues" being negotiated, she said. "They are issues that help families ensure a middle-class life."

While union workers walked the picket lines, managers and non-union employees performed their duties.

Verizon's Young said the company began training managers and non-union workers at the beginning of the year to prepare for the strike. Thousands of employees were brought in from as far away as Texas, California, and Colorado, he said. They have worked 12 hours a day, six days a week, he said.

The company also used newer technologies to resolve 50,000 problems a day remotely, Young said, such as resetting set-top boxes and routers and testing lines.

Peter Thonis, Verizon's chief communications officer, acknowledged there was "a little bit of a slowdown" in installing new services like FiOS, but said replacement workers largely kept up on repair work.

The company said in its statement that it will "quickly address any backlog in repairs and unfulfilled requests for service."

While customers who will now get their FiOS services installed on time may be winners, Verizon's Thonis said neither the company nor the workers could claim a victory.

"We still have a lot of hard and difficult bargaining to do. None of the major issues that were on the table before the strike, are off the table," he said.