After A Hard Fight, Fewer Benefits For FairPoint Workers

Feb 25, 2015

Most of FairPoint Communications' unionized workers return to their jobs today after a strike that lasted more than four months.

Last weekend, they ratified a new contract with the company, but unlike past negotiations with FairPoint and its predecessors, the new pact does not represent an improvement over the expired agreement.

“You can’t look at this past labor negotiation like anything we’ve ever done before,” says Mike Spillane of the International Brotherhood of Electrical Workers in Vermont. “We put up the best fight we could and I think we came out of it fairly well.”

Spillane says labor laws and corporate attitudes toward organized workers have created a situation that favors employers. He says the new contract is better than the terms FairPoint imposed in August when it declared an impasse in negotiations.  

“It’s not perfect,” Spillane says. “Both sides came away not getting everything they wanted, but each side got enough that they can live going forward.”

"You can't look at this past labor negotiation like anything we've ever done before. We put up the best fight we could and I think we came out of it fairly well." - Mike Spillane, International Brotherhood of Electrical Workers in Vermont

In reality, there are some differences and  some similarities to the terms FairPoint imposed.

In the area of health care for existing employees, FairPoint covered 100 percent of the premium costs under the old contract. The company wanted to cut that to about 80 percent, with workers providing the rest.

The new contract moves workers to a union-administered plan, which the unions say provides better coverage. The company will pay 85 percent of the premium costs, but FairPoint says that’s equivalent to 79 percent coverage under the old plan, so the cost to the company is the same as they had bargained for.

In addition FairPoint’s share of health premium coverage can’t increase more than 4 percent annually under the new contract.

The new agreement also contains changes in health coverage for future retirees. Under the old contract, FairPoint continued to pay health care premiums for retired workers. Now the company will provide monthly stipends to retirees, which will end when they turn 65.

The new contract will move future union workers from defined benefit pensions to employee-funded and managed 401K plans. It also freezes past pension accruals for existing employees, cuts in half future accruals, and caps them after 30 years with the company.

The new contract will move future union workers from defined benefit pensions to employee-funded and managed 401K plans. It also freezes past pension accruals for existing employees, cuts in half future accruals, and caps them after 30 years with the company.

In laying out its position last year, FairPoint said its goal was to end defined benefits for union employees. Another point of contention was the use of outside contractors.

But both sides are happy with the outcome. Spillane says the contract protects union workers from being replaced by outside contract employees.

“On that particular article I think we did very well. The company wanted to be able to subcontract whatever they wanted, whenever they wanted for how long they wanted,” he says.

The union did succeed in preventing imposition of a two-tiered wage structure FairPoint had demanded.

For its part, FairPoint says the new rules give it greater flexibility to use sub-contractors to respond to everything from weather emergencies to technology changes that require added skills.

The union did succeed in preventing imposition of a two-tiered wage structure FairPoint had demanded.

On the plus side for FairPoint, the contract eliminates unlimited paid sick leave and it lowers short-term disability benefits.

In a statement releases after negotiations concluded, FairPoint CEO Paul Sunu said the agreement puts the company in a better position to be competitive in providing telecommunication services to northern New England.