Verizon has reached a tentative, three-year contract agreement with the Communications Workers of America and the International Brotherhood of Electrical Workers, two unions representing workers in the telco's Northeast region.
The agreement still has to be ratified by the workers. The two unions represent approximately 65,000 employees from Maine to Washington D.C. The pact provides the workers with wage increases totaling 10.5% during the next three years.
The rising cost of medical benefits—and who would pay for them—was a major source of contention throughout the negotiations, officials said.
According to Verizon, the contract changes the way health benefits will be paid for on behalf of future retirees. Instead of a defined benefit, the company will contribute a fixed dollar amount per year toward retirement medical benefits. That will be applied to workers who were hired on Aug. 2, 2008 and later, according to the company.
The company and the two unions agreed to find ways to “assure access to quality, affordable health care” in the future and will work together on a national Labor and Management Partnership for Health Care Reform initiative.
Verizon agreed to transfer 600 Verizon Business group positions into its telecom group, and make 900 temporary employees permanent workers.
Verizon officials said he three-year agreement—compared to the recently expired three-year deal—will give the company flexibility to align future agreements to the fast pace of change in the telecommunications industry.