AT&T, CWA Remain in Talks After Labor Contracts Expire

AT&T Inc. (T), the largest U.S. phone company, failed to reach agreement to renew four contracts with one of its unions and said it will extend negotiations to reach a deal.

AT&T, based in Dallas, and the Communications Workers of America didn’t agree before the expiration of the East, Legacy T, Midwest and West contracts, the carrier said in a statement.

The Communications Workers of America is renegotiating four separate contracts with AT&T, affecting a total of 40,000 workers. On March 31, union members voted to authorize CWA to call strikes if agreements on new contracts weren’t be reached. The parties “have agreed to continue to negotiate,” AT&T said in the statement earlier today.

“We’re committed to continuing to work together with the union to reach an agreement that will allow us to continue to provide and protect” jobs, Marty Richter, a spokesman for AT&T, said in an e-mail after 5 p.m.

The union is focusing on local and economic issues such as health care, pensions and pay, Candice Johnson, a spokeswoman for the CWA, said in telephone interviews.

“We’re just going to keep pushing forward and that’s what happened today,” she said in a late-afternoon interview.

Declining Margins

The union, which represents about 16 percent of AT&T’s 256,000 workers, has been organizing rallies and meetings to help push for a deal to address issues ranging from guaranteed weekend days off to health-care benefits. In 2004, it led a four-day stoppage at SBC Communications Inc., which bought AT&T the following year.

“Unions are trying to maintain many things they’ve gained over the years, and it’s hard,” Ivan Smith, a partner at Lewis Brisbois Bisgaard & Smith LLP (1277L), said in an interview. “In general, the strike is the last thing a union wants. If the employer can withstand a strike, you lose all the leverage you had. You don’t make that move unless there’s no other recourse.”

AT&T and Verizon Communications Inc. (VZ) are negotiating new union contracts amid declining margins and rising network investment costs. In 2011, AT&T’s total operating revenues rose 1.9 percent to $126.7 billion while capital expenditure climbed 3.1 percent to $20.1 billion.

Current Contracts

Last August, CWA called an end to a two-week strike by 35,000 members at Verizon and Verizon Wireless, when the companies agreed to extend the workers’ current contracts and resume bargaining. Verizon and Verizon Wireless, the unit it co- owns with Vodafone Group Plc (VOD), and the union are yet to reach a new agreement.

AT&T and Verizon regularly negotiate with unions representing larger parts of their workforce. About 55 percent of AT&T’s employees are represented by CWA, the International Brotherhood of Electrical Workers or other unions, according to the company’s annual report.

Contracts covering about 120,000 employees will expire during 2012, according to AT&T.

To contact the reporter on this story: Olga Kharif in Portland at okharif@bloomberg.net

To contact the editor responsible for this story: Ville Heiskanen at vheiskanen@bloomberg.net

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