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Verizon to Pay $50,000 Rewards to Stop Vandalism Amid Strike

Verizon Communications Inc. (VZ)’s conflict with unions representing about 45,000 employees escalated in its third day with workers staging protests and the company saying it will offer $50,000 rewards to stop vandalism.

Workers picketed Verizon locations throughout its region today, with more than 200 gathering in front of the company’s New York headquarters. The workers in Manhattan booed as people walked in and out of the office and chanted, “When they say, ‘give back,’ we say ‘fight back.’”

Verizon, the second-largest U.S. phone company, said it will begin advertising the rewards for information about vandalism to its network and equipment after at least a dozen acts of sabotage. The advertisements will begin in local markets tomorrow, said Peter Thonis, a company spokesman.

In Delaware, Verizon today filed a lawsuit against local unions asking a state judge to issue injunctions to stop demonstrators from blocking entrances in Newark and Dover, Delaware, shutting off power, and using “crazy glue” to jam fence mechanisms and service-truck locks.

“Plaintiff has suffered serious disruption and curtailment of its business” from the strikers’ acts, the company said in the complaint filed in Delaware Chancery Court in Wilmington.

Expired Contract

Verizon and the unions are at odds over a new contract to replace one that expired at midnight on Aug. 6. The company, facing a decline in its traditional landline phone business, is seeking work-rule changes and monthly health-care payments. Workers contend they shouldn’t have to make substantial concessions as profits rise and executive pay remains healthy.

Verizon is having “high-level” negotiations with the unions, Thonis said in an interview. The striking employees, about a quarter of Verizon’s staff, are members of the Communications Workers of America and the International Brotherhood of Electrical Workers unions.

Verizon, whose larger and more profitable wireless unit is unaffected by the strike, fell 2 cents to $33.10 at 1:57 p.m. in New York Stock Exchange composite trading. The stock had dropped 7 percent this year before today.

Verizon has trained more than 40,000 managers and contractors to step into the roles of union workers and minimize any delays or disruptions in service calls and installations.

‘Contract Constraints’

In an Aug. 7 statement, Verizon Chief Executive Officer Lowell McAdam said the company needs concessions from unions because of the division’s customer losses and eroding profitability. He also cited the competitive threat from cable- television providers, saying they don’t have similar “contract constraints, enabling them to be more nimble and flexible meeting customer needs.”

Verizon’s competitors also include AT&T Inc. (T), the biggest U.S. phone carrier and second-largest wireless operator. AT&T has proposed acquiring Deutsche Telekom AG’s T-Mobile USA, allowing it to surpass Verizon Wireless as the No. 1 U.S. mobile carrier.

Verizon’s revenue and profit fell last year as declines in the landline business offset growth in wireless. The number of fixed lines, including residential and business customers, slid 8.2 percent to 26 million at the end of last year, extending declines since 2003. During the same period, wireless subscribers more than doubled to 94.1 million.

First in 11 Years

The strike is the first at Verizon in 11 years. Although Verizon’s unions authorized strikes in 2008 and 2003, they haven’t gone out on strike since 2000. That 18-day standoff affected 28 million customers and cost Verizon $40 million in revenue. The company settled the dispute by agreeing to a 12 percent wage increase over three years.

At the New York protest, Dennis Swarbrick, a 54-year-old technician who said he has worked at Verizon for 20 years, said he is concerned about the company’s demands because his son is going to college in a few weeks and he has other financial obligations.

“I have a mortgage,” he said. “I have car insurance. I work week to week. What am I going to do next week when the bills come?”

The lawsuit is Verizon of Delaware Inc. v. Communications Workers of America, CA6766, Delaware Chancery Court (Wilmington).

To contact the reporter on this story: Devin Banerjee in New York at dbanerjee2@bloomberg.net

To contact the editor responsible for this story: Peter Elstrom at pelstrom@bloomberg.net

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