by Timothy McQuiston Vermont Business Magazine At meetings across Northern New England last week, union members in Maine and Vermont voted to authorize union leaders to call a strike at FairPoint Communications, union representatives have said. Members in New Hampshire are expected to complete their voting process by Thursday, according to a union leader. Representatives of the Communications Workers of America (CWA) Local 1400 and International Brotherhood of Electrical Workers (IBEW) Locals 2320, 2326, and 2327 have been in negotiations with company management since late April and have yet to reach an agreement. The contracts of approximately 1,700 union employees in Maine, New Hampshire, and Vermont expire on August 2. There are about 450 Vermont workers in the bargaining unit.
“It’s disappointing that management has driven us to this point,” said Mike Spillane, Business Manager of IBEW Local 2326 in Vermont. “Our members want nothing more than to continue working for our customers. But if the company keeps disrespecting the collective bargaining process, it may come to a strike.”
FairPoint has a different view as the five-year contracts near their end.
"We are not surprised about the Strike Authorization Vote – it is after all, a standard part of the Union process," said Angelynne Amores Beaudry, Director of Corporate Communications for FairPoint Communications, in a statement. "It is important to remember that the Unions are obligated under their current collective bargaining agreements not to strike before the contracts expire on August 2nd, and the vote does not affect the likelihood they will do so then. As we’ve said, and as has been repeated by the Unions, the vote to authorize a strike is part of the process. Like any prudent company, we have plans to ensure our services to our customers continue without interruption in the event of one."
Beaudry told Vermont Business Magazine that because of the nature of the negotiations, she could not offer specifics on the proposed deal. She did say that up to this point FairPoint has been providing 100 percent of health and retirement benefits to its unionized workers and is seeking to align benefits with non-union FairPoint workers.
"So things have to change," Beaudry said. The company, she said, is also looking for more "flexibility" to deal with the new world of rapidly changing technology, while having the ability to respond to customer needs.
FairPoint CEO Paul Sunu has proposed a four-pillar strategy for increasing value in the company’s shares: operations, regulations, revenues and labor negotiations.
Sunu said in a quarterly conference call in May: “Our core proposals include freezing the defined-benefit pension plan, discontinuing post-retirement health care benefits for active employees, moving bargaining unit employees to the contributory benefit plans available to other employees, making changes to layoff and recall provisions and the elimination of the related costs and changes to various other work rules that will allow us to more effectively serve customers.”
To date, the union workers receive 100 percent health care premium coverage and defined benefit retirement contributions, plus unlimited sick days. For management employees, FairPoint covers 75 percent of health care and the first 5 percent of 401(k) retirement savings plans.
According to the union representatives, a strike authorization vote is a necessary precursor to a work stoppage, but does not require the union members to actually go on strike. Such a decision could be made later by union leaders. In a statement, the unions said that high service volume caused by extreme weather in New Hampshire led to an extension of voting times in that state. Full voting results from all three states will be available once voting in New Hampshire closes, they said in a statement.
According to Spillane, the response from those in the bargaining unit who voted has been "overwhelming."
He told VBM in an email: "NH will be done on Thursday, as for Vermont we had about 60 percent of the members vote with only a couple of no votes– largest turnout we have ever had in favor of a strike!"
According to the union representatives, the major sticking point between management and labor is the company’s insistence on being able to replace union workers with outside contractors.
“For the sake of New England customers, we will not let management ram this proposal through,” said Don Trementozzi, President of CWA Local 1400, which represents FairPoint workers in all three states. “New England communities will suffer if FairPoint is allowed to hire poorly trained, out of state temps who have no investment in our communities to maintain our vital telecommunications infrastructure. This proposal hurts our members and our customers – it only helps the Wall Street hedge funds that own the company.”
FairPoint’s stock is trading at $13.70 - $13.96 per share today with its 52-week range at $8.50 - $15.83. It began 2014 at about $11. It was as low as $3.62 in October 2011, eight months after the company emerged from bankruptcy.