Monday, August 22, 2011

The Urban Politico Interview: Verizon Union Strike

Verizon Union Busting or Genuine Belt Tightening?

From Verizon's Corporate Website:

Verizon is a global leader in delivering innovative communications, information and entertainment. We offer voice, data and video products and services over intelligent wireless, broadband and global IP networks that meet customers' growing demand for speed, mobility, security and control. As a committed corporate citizen, we use our advanced communications services to address important issues confronting our society.

Verizon Communications Inc is a publicly traded corporation and home to more than 194,000 employees. Of those 194,000 employees, 45,000 belong to two unions, Communications Workers of America and International Brotherhood of Electrical Workers. According to Verizon's 2010 Annual Report, the company earned $106.5Bn in revenue in 2010. Outgoing CEO Ivan Seldenberg relayed his satisfaction of the results to shareholders stating:
"Our results in 2010 reflect the fundamental strength of our company. Revenues grew 1.9 percent on a comparable basis for the year, the second straight year of positive revenue growth in a very sluggish economy. Our growth was propelled by strong performance in wireless, broadband and strategic business services, and our results improved in the second half of the year, giving us good momentum entering 2011."

According to a Communications Workers of America communication to Union Members, Verizon Communications Inc. earned a place on The Washington Times - Tax Evader's Wall of Shame for its combined 2009 and 2010 pre-tax income of $24.2Bn and U.S. tax refund of $1.3Bn. Verizon Communications Inc. paid $0 in Federal Income Tax for 2010. In 2010, CEO Ivan Seldenberg earned $30.9M in Total Compensation, which included a base salary of $2,100,000, a cash bonus of $2,953,125, and other compensation of $25,880,000. Seldenberg earned himself a spot on Equilar's 2010 Top 200 CEO List and the 11th spot on Forbes 2010 CEO Compensation List.

2010 Compensation for Verizon Communications Inc. Leadership Team
Lowell C. McAdam, President and Chief Executive Officer, Verizon


John W. Diercksen, Executive Vice President - Strategy, Development and Planning, Verizon


Daniel S. Mead, President & Chief Executive Officer, Verizon Wireless

Virginia P. Ruesterholz, President, Verizon Services Operations

Francis J. Shammo, Executive Vice President and Chief Financial Officer, Verizon

*Unlisted Salaries
Randal S. Milch, Executive Vice President and General Counsel, Verizon
Roger Gurnani, Executive Vice President and Chief Information Officer, Verizon
Thomas J. Tauke, Executive Vice President - Public Affairs, Policy and Communications, Verizon
John N. Doherty, Senior Vice President – Investor Relations, Verizon
Anthony J. Melone, Executive Vice President and Chief Technology Officer, Verizon
Marc C. Reed, Executive Vice President – Human Resources, Verizon
Peter W. Thonis, Chief Communications Officer, Verizon

Verizon Communication Inc., Financials - Corporate Highlights
6.3% growth in cash flow from operations
16.4% increase in free cash flow
4.8 million new wireless customers
25.6% growth in wireless data revenue
796,000 new FiOS Internet connections
722,000 new FiOS TV connections
31.9% growth in FiOS revenue
23.1% total shareholder return
2.6% annual dividend increase

As an outsider looking in, Verizon looks to be a growing, financially sound and very profitable corporation. 2010 was a good year to the company and 2011 started off strong. Yes, I completely understand that technology has advanced past traditional medians where consumers are no longer dependent on landline phone services and are now very dependent on mobile phone service. From the financial highlights above, we can see that Verizon has more than made up for this loss with the rapid growth of its wireless business and recent additions of FIOS internet and television. The technology has transformed and so has Verizon's capabilities for advancement. The backbone of Verizon's success, growth and profitability is its employees. With all this success, instead of rewarding employees for their hard work and contributions, Verizon decided it was time to shed some weight and has launched an attack on the 45,000 unionized employees.

I think it is very important that we look at this from the point of the employees who made the decision to strike and understand how important collective bargaining rights are. I had an opportunity to interview a Verizon CWA Union Employee and she was able to shed some light on the situation and give us a union perspective.

Naomi Bolden, Roanoke VA -- CSSC -- Sales / Customer Service Rep, Communication Workers of America Local 2204 - Roanoke Area Vice President, Member 4-Years

The Urban Politico: Please give us a brief job description and summary of your daily responsibilities

Naomi Bolden:
I answer about 60 calls a day-- help customers with bills, questions, changes on account, new service, move orders. I upsell to customers new products and bundled services.

The Urban Politico:
Based on reports we’ve seen, our understanding is that Verizon has given the union over 100 concessions and they have not been willing to come to the table to make fair and honest negotiations with union members. Can you provide The Urban Politico a copy of those concessions or list the most important measures?

Naomi Bolden:
The company is proposing to shift thousands of dollars in health costs to our members, without offering any improvements in health care quality or any support for our members to navigate the health care system. They are saying "You’re On Your Own" to our members and their families who need quality, affordable health care. The Company has proposed to terminate the major health benefit plans that CWA has negotiated over decades. Here are a list of a few concession proposed to union members by Verizon.
  • The company is demanding premium contributions for both the medical plan and the dental plan.
o In the first year, the medical plan premiums for a single employee would range from $390 a year to $1,420 a year, depending on the plan they choose.
o For a family, the medical plan premium would range from $1,380 a year to $3,810 a year, depending on the plan they choose.
o Premiums would increase in each year after that.
  • The company wants to impose premiums for retirees as well. For pre-Medicare retirees, a single retiree could pay somewhere between $290 and $1,320 and a pre-Medicare retiree with a family could pay between $1,280 and $3,710 depending on the plan they choose.
o Single Medicare retirees could pay between $145 and $960 a year depending on the plan they enroll in, for a family between $640 and $2,155 a year depending on the plan they choose.
  • Premiums for the dental plans would be up to $185 per year for a single employee and up to $435 per year for a family, depending on the plan they choose.
o Retirees would also have to pay for dental coverage, the same rates as active employees.
  • The most drastic changes are proposed in the medical plan. The company proposed to eliminate the PPOs and network plans that have been in place for decades and replace them with high deductible health plans.
  • Before the plan would begin to pay any benefits, a single employee would have to pay $1,000 and a family would have to pay $3,000.
The Urban Politico: On what date were employees notified of the pending changes to the contracts?

Naomi Bolden:
Contract Negotiations began on June 22, 2011.

The Urban Politico:
When did the union notify Verizon that the proposed conditions and changes were unacceptable to union members?

Naomi Bolden:
Within one week of June 22, 2011.

The Urban Politico:
When did the union make the decision to commence with a strike?

Naomi Bolden:
Our contract expired on August 6, 2011 and we began our strike on August 7, 2011.

The Urban Politico:
Do you think the current perception of unions are positive or negative and, if negative, what would you like people to know that may change this perception?

Naomi Bolden:
I think we have a lot more of a positive perception and support than negative. Having a union usually means better wages and benefits, makes sure workers are treated fairly and equally, give workers a voice in the workplace decisions that affect their lives and unions give workers a real sense of having their own power.

The Urban Politico:
What can people do in order to assist?

Naomi Bolden:
Call Verizon and ask them to bargain with us a fair contract, come walk our picket lines or donate water to the striking employees on the picket lines.

The Urban Politico:
What does the union think the Administration/National Labor Board/etc ought to be doing?

Naomi Bolden:
They are doing fine-- we have filed unfair labor practices against Verizon for not bargaining right now.

The Urban Politico:
What happens if the union loses this fight?

Naomi Bolden:
Losing is not a option. We will bargain until we receive a fair contract.

The Urban Politico:
Any additional information or thoughts you would like to share with our readers?

Naomi Bolden:
These negotiations are not about money at all, as the public sometimes sees it. We just want to keep what we have earned over the last 50 years. If my CEO can make in a day what I make in a year, is that really fair at all?

In the words of the late Ted Kennedy, "When does the greed stop?" At what point will corporations realize that they are only as strong as their workforce? There is a difference between tightening your financial belt to ensure further strength and tightening your belt to further line the pockets of shareholders and senior management. The earlier often leads to good and a return back to the employees. Verizon paid $0 federal income taxes in 2010 and has probably done so for a long period of time. So essentially the very employees they are looking to take from, they have already taken from them in the form of a $1.3Bn tax refund. Verizon is asking these very employees to line the company's profits twice.

Someone may look at the concessions above and think, "wait a minute, this is what I pay for my medical or dental benefits," but union employees take a little less in annual pay, pay union dues and sacrifice other perks that traditional employees are privileged to. Non-union employees should understand that the successful negotiation of collective bargaining rights (wage scales, working hours, training, health and safety, overtime, grievance mechanisms and rights to participate in workplace or company affairs) directly impacts them as well. Employers are blocked from driving down wages and this coincides with the wages of non-union employees. It is in the best interest of everyone to support unions and stand up for them when they are under attack.

On Saturday afternoon it was reported that the strike had ended and employees agreed to go back to work on Tuesday, August 23. However, a deal as not been reached regarding the contracts and both sides are headed to the table to negotiate a fair deal. It appears that Verizon is now willing to negotiate in good faith with the hopes of ending this dispute in a timely manner.

Verizon Communications Inc. (VZ) and its unions each proclaimed triumph after hashing out an accord to send 45,000 employees back to work under a previous contract until a new one is negotiated, resetting nearly two months of negotiations and causing disappointment among some union members.

The agreement announced Saturday marks a change in the tenor of the increasingly bitter negotiations and a new period of uncertainty for Verizon's union workers whose ranks have been nearly halved since the last strike in 2000.

"This process is going to take definitely weeks, not days," Larry Cohen, president of the Communications Workers of America, told union members on a conference call Sunday, noting that employees could go back on strike if significant progress isn't made.

Empowered by the walkout, members of the CWA and the International Brotherhood of Electrical Workers had staged pickets outside Verizon executive offices in New York City and in front of the homes of its highest-ranking officers, but the decision to return to work without a new contract upset some union workers who said it sent a mixed message to Verizon.

Jeff Rafos, 35 years old, a CWA Local 1101 cable splicer, said while he'll appreciate getting his old paycheck as negotiators work to hammer out a deal, he was prepared to continue a strike for as long as necessary. "What was the point of all this? Why give up our paychecks just to start talks all over again?" he said.

Union members will return to work Tuesday under the terms of a 2008 contract, which is in effect indefinitely. However, both sides can call off the talks within the first 30 days if they determine they aren't making significant progress.

"They had time before the contract expired to bargain with us," said Jim McCarthy, 51, a field technician with CWA Local 1120. "We have leverage when we're out on the picket lines, and this just hands it right back to Verizon management."

CWA's Cohen defended the move, saying the union had achieved its initial goal: compelling Verizon to consider its demands for job security and limits to a proposed rise in workers health care expenses. "We believe there's an opening here to bargain effectively."

I reached out to Naomi on Sunday and asked her if she had any additional thoughts, since the announcement of the strike's end and she had this to say:
"I have full faith in my bargaining team and the decisions they’ve made. We made the decision to go on strike, because Verizon would not bargain in good faith (not showing up to table, not willing to remove any of there retro demands, etc). The company came to us on Friday evening and removed some of those demands and said they promised to bargain in good faith, if we returned. So the agreement was set. This is only a 30-day agreement with the potential to strike again after 30 days, if Verizon’s words do not hold true. We won the battle but the war is not over. We are still fighting for our contract and to protect middle class America."

Naomi has pretty much summed up the reasoning behind this fight and why we all should care; we need to protect middle class America. As we saw in Wisconsin, when or democracy is threatened, you must take matters into your own hands and fight for your rights. The 45,000 employees who made the sacrifice to go on strike to protect themselves and their fellow citizens should be commended. We live in The United States of America not The United Corporations of America.

CWA on Strike

Should Verizon be looking to cut cost on the backs of union employees?
Do you think Verizon will keep its word and negotiate in good faith?
Are you a union employee or have you ever been a union employee?
If a company increases its profits and executive compensation from one year to another, should they make cuts to employee benefits or lay off employees?

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