Timothy McQuistonVermont Business Magazine Unions representing over 1,700 of FairPoint's approximately 2,550 employees in Vermont (about 700), New Hampshire and Maine went on strike at 12:01 Friday morning. FairPoint said its operationswill continue "without disruption."Negotiations had begun on April 25. The two biggest issues involve the company's desire to align union worker benefits with packages common to its other employees and it also wants to bring in more non-union employees to do jobs typical of union positions to allow it to be more flexible as the need arises, say following a storm. The unions said it anticipates these two moves costing union members $700 million on the one hand and, on the other, leading to replacing union workers with non-union employees.
The North Carolina-based company, which emerged from bankruptcy in January 2011, has seen its stock price about triple since a precipitous fall (from nearly $25 per share in 2011 to under $4 in 2012), but it is still losing money. As of mid-Friday morning, its shares had fallen very slightly to $14.42. Its 52-week range is$8.92-$16.91. FairPoint bought Verizon's Northern New England business in March 2008 for $2.3 billion and it filed for bankruptcy in October 2009.
FairPoint union members walk the picket line Friday morning at the local headquarters in South Burlington; they started at the usual office opening time of 7:30. The offices, however, were closed. Workers who crossed the line to work found the doors locked. Management reportedly was working from home and other services were outsourced. This is the second strike to hit South Burlington this week. Public school teachers went on strike Tuesday and were still at it Friday. Photos by VBM.
“The company’s actions have brought us to this place,” said Peter McLaughlin, Business Manager of IBEW Local 2327 in Maine. “We did not want to take this step. Our members want to work; they want to take care of their customers. However, our bargaining team worked as hard as we could to reach a fair agreement that would preserve good jobs and help the company prosper. We've offered significant concessions to this company that would save them hundreds of millions of dollars. But they absolutely refuse to compromise on any significant issue.”
The unions maintain that FairPoint wants to slash labor costs in order to either sell the business or satisfy shareholders with dividends (it suspended dividends as part of the restructuring).
“This company is largely owned by a small number of Wall Street hedge funds like Angelo, Gordon & Co,” said Don Trementozzi, President of CWA Local 1400. “Their priority is to squeeze as much money as possible out of the workers who’ve kept this company going, not to provide the 21st-century telecommunications system that northern New Englanders need and deserve.”
The International Brotherhood of Electrical Workers (IBEW) System Council T9 includes local unions in Maine, New Hampshire, and Vermont and said it represents nearly 1,700 employees at FairPoint Communications. The Communications Workers of America (CWA) Local 1400 said it represents nearly 300 FairPoint employees in the three states. The CWA has a strike fund; the IBEW does not. Striking workers said they might have to find work if the strike continues for very long. Their website iswww.fairnessatfairpoint.com.
FairPoint spokeswomanAngelynne Beaudrysaid FairPoint is disappointed by the unions' decision to walk out, but the company has comprehensive plans in place to ensure continuity of service to its customers.
"We value every customer and it is important for them to know that we have comprehensive contingency plans in place to ensure the service they, and the economy and communities of northern New England, rely on continues without interruption," Beaudry said.
"The previous contracts with our unions expired in early August and, unfortunately, despite months of negotiations the two sides remain far apart on the issues we think are key to the future of the company," said Beaudry. "While we have implemented our final proposals, we have always remained willing to negotiate and have committed to evaluate and respond to any counter-proposal from the unions that meaningfully addresses the core issues of these negotiations. So far we have not received any such counter-proposals."
"At no point in the negotiation did FairPoint propose to reduce base wages for existing employees," she said. "We sought instead to bring the existing health care and pension benefits in line with what we believe are mainstream for employees in the region, and transition union represented employees to the same or similar benefit plans as offered to other FairPoint employees, including management. We believe these changes are fair to our employees while enabling the Company to provide modern telecommunication products and services to our customers, communities and states at a competitive price."
She said that under the previous contracts, the company paid 100 percent of all healthcare premiums for its unionized workforce, provided unlimited paid sick days, a defined benefit pension plan with no employee contributions, and a 401K plan with a company match. In total, under the old agreements, the average wage and benefit costs for FairPoint's union represented employees inMaine,New HampshireandVermontwere approximately$115,000per year – not including the future costs of pension and other post-retirement benefits.
Beaudry said, "We are disappointed in the unions' decision to strike. In the meantime, FairPoint will focus on meeting the product and service needs of our customers."
Mike Spillane, Business Manager of IBEW Local 2326 in Vermont, said. "This fight is about keeping good middle-class jobs in our region and making sure that customers get the service they deserve from well-trained, experienced workers, not low-wage temps from out-of-state or overseas. Our members have been organizing and educating the public for well over a year. While they would much rather continue to work and take care of our customers, they are absolutely united and ready to strike for as long as it takes to win a fair agreement.”
FairPoint said residential customers who need assistance can call1-866-984-2001. Business customers can call1-866-984-3001.
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SOURCES: FairPoint Communications, Inc.IBEW Local 2326Vermont. 10.17.2014