Verizon Wins Upper Hand as Striking Workers Return to Jobs

The 45,000 striking union workers have returned to their posts at Verizon Communications after nearly three weeks on picket lines. Earlier this month, the Communications Workers of America and the International Brotherhood of Electrical Workers voted to go on strike after they said they had been unable to reach agreement with Verizon regarding several matters, including their contributions to pensions and healthcare plans.

As it happens, the workers and the company still have not reached an official agreement, but the contours of the debate have narrowed enough to get the workers back to their jobs. Major issues remain to be discussed, but the disputes are now more focused and narrowed, according to a statement on the CWA website.

“We are committed to sitting down and reaching an agreement that is fair to both sides,” Verizon spokesperson Richard Young told the E-Commerce Times. “The wireline business has declined greatly over the past decade, and we would like union employees to work on the business’ cost structure and come up with ways to make it more successful.”

Wireline Versus Wireless

This has been the crux of the disagreement. Verizon contended that because the wireline side of the business is doing poorly it needs to ask for concessions. Unions have said Verizon is pushing too hard.

The workers are returning to their jobs under terms of their prior contracts. However, Phillip Wilson, president of the consulting firm Labor Relations Institute, says the unions were the ones that blinked in this standoff.

“This settlement is clearly a loss for the CWA and the IBEW,” Wilson told the E-Commerce Times.

“The unions have substantially reduced their leverage in negotiations,” he said. “Verizon is very unlikely to believe that the unions will strike again based on this settlement. While I am sure Verizon wanted to stop the service disruptions and bad publicity from the strike, they clearly proved they were able to continue operating during the strike.”

A Miscalculation?

Going on strike in the first place was a miscalculation on the part of the unions and a surprising one at that, said Gary N. Chaison, professor of Industrial Relations at Clark University’s Graduate School of Management.

“The communication unions are known to be astute about these things,” he said. “But the workers didn’t gain anything — they are keeping their old contracts for now, that is all.”

Essentially what Verizon has demonstrated to the unions, Chaison continued, is that it can manage just fine without them — despite the complaints in some quarters of poor customer service.

“What it essentially said to the unions is that ‘We are prepared for a strike and you won’t get much public sympathy out of this dispute.'” Now the unions have played their best hand and didn’t come out with anything tangible, he said.

Strike vs. Threat

Usually it is the threat of a strike — versus a strike itself — is what gives a union the most leverage at the bargaining table, Wilson said. “Now that this threat has diminished, as evidenced by the fact that Verizon gave up nothing to end the strike, the main bargaining chip for the unions is gone.”

They should never have gone out if they weren’t ready to stay out until they got a contract, and they never should have settled for anything less than a major concession, he concluded. “Their members should be very upset with the leadership who orchestrated this strategy.”

Both Sides Had Something to Fear

There were some risks to Verizon, if the strike had lasted, though, according to Maria O’Brien Hylton, professor of law at Boston University.

These dangers included “growing concern about delayed repairs and service which could mean, over time, an erosion in its customer base,” she said.

At bottom, she said, the only thing the parties have agreed to do is return to the bargaining table and try one more time to resolve their outstanding issues. “This suggests both sides see at least some potential advantages in ongoing talks and some dangers from a continuing strike.”

In this economic environment, O’Brien Hylton added, it was the union that had the most to lose because in strikes during periods of high unemployment, employers almost always hold the advantage.

“With the official rate of unemployment above 9 percent — and the real rate well north of there — it is inherently risky to refuse to do a job when you have one,” she said.

What Happens Next?

Given all this, O’Brien Hylton speculates the company likely views the relatively short strike, followed by a return to work without an agreement, as a sign that it should continue to demand the cost-shifting measures it says it needs.

“I’d expect to see Verizon continue to push hard for the contract terms it wants. The serious question for the union is how to hold onto its healthcare benefits which are, frankly, extremely generous by the standards of the private sector.”

Union members maintain they are defending middle-class standards of living, she continued. “The problem, of course, is that middle class standards of living are eroding as healthcare costs eat up more and more of employees’ wages. Why should Verizon workers be exempt from that?”