Under the new contract, which runs through Aug. 4, 2018, the company’s workers in northern New England agreed to join a cheaper health care plan, lost their unlimited paid sick leave, received lower short-term disability benefits and agreed not to include new employees in the company’s pension plan.
The International Brotherhood of Electrical Workers and Communications Workers of America called the new contract terms a win for current employees, because of improved health care terms, maintained pensions for current employees, a health stipend for new retirees and a marginal change to the company’s 401(k) plan.
“I think the company could not believe that we stood our ground,” said Don Trementozzi, president of the CWA for Maine, New Hampshire, and Vermont. “We do believe we did the best we could to save the new employees’ pensions. We could barely save the current employees’ pension.”
Trementozzi called the new health plan, a Blue Cross and Blue Shield group plan through IBEW and another union, “head and shoulders” above the plan that FairPoint imposed.
The company will pay 85 percent of the premium, the union said. The company frames the new plan as a win because the plan has lower administrative costs and only premiums cost 79 percent of the previously imposed plan. Additionally, premium cost increases to the company are capped at 4 percent per year.
The workers also won language eliminating a two-tier wage system, which paid new employees starting at minimum wage, and protected employees in the bargaining unit from being replaced by contract workers, Trementozzi said.
“We think the language is great,” Trementozzi said. “That’s why it took us seven weeks in mediation. It wasn’t easy.”
New employees will no longer be eligible for FairPoint’s pension plan. Current employees will have their benefits accrue at 50 percent of previous terms, and their defined benefits capped after 30 years with the company. All employees will have a dollar-for-dollar match in their 401(k) retirement accounts, up to 5 percent of their paychecks.
That’s a slight change from the previous 401(k) deal, according to Trementozzi, because the company used to pay around 82 percent of an employee’s 6 percent of 401(k) withholdings.
Active employees will not receive medical benefits once they retire, but if someone retires in the next two-and-a-half years – the term of the contract – that worker will receive an $800 monthly stipend until age 65 to buy a health plan, plus $400 for a spouse.
Trementozzi said the union got the best deal possible with the $800 insurance stipend, given a U.S. Supreme Court decision that allows employers to cancel retiree benefits once the person is in retirement.
Paul Sunu, chief executive officer of FairPoint, said in a statement that “negotiations were often challenging” but called the agreements “win-win.”
“With this contract in hand, and the flexibility to manage our workforce more effectively, we are better positioned to provide the telecommunications services northern New England wants and needs,” Sunu said.
The deal also allows FairPoint to continue the use of contracted workers, but does not allow it to replace union workers with contracted workers.
“Our near-term plan is to utilize our returning unionized workforce in conjunction with the contractors we have in the region to quickly address any remaining service and installation issues and resume normal operations as soon as possible,” Sunu said.
Angelynne Beaudry, spokeswoman for FairPoint, said the”near-term” is not defined, and the company has not disclosed how many contracted workers it uses.
