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Regional telephone accords.

Regional telephone accords

Following their settlement with American Telephone & Telegraph Co. (AT&T), the Communications Workers and the International Brotherhood of Electrical Workers opened bargaining with the seven regional companies which, with AT&T, made up the Bell System prior to the court-ordered breakup in 1984. Communications Workers President Morton Bahr had indicated that the unions hoped to use the AT&T settlement (see Monthly Labor Review, August 1989, pp. 49-50) as a basis for settling with the regional companies. One area of particular interest to unions was family care benefits - such as employee time off for the birth or adoption of a child or to care for disabled or elderly family members - which was a feature of the AT&T settlement. This issue was resolved, as the regional companies agreed to provisions essentially the same as those for AT&T. A major goal of the regional companies was to slow the rise in their costs for health insurance by shifting some of the burden to employees. The new 3-year contracts do not call for employees to begin paying part of premium costs, which the companies had sought, but some contracts do include cost control measures, such as increased deductibles, coinsurance obligations, and shifts to preferred provider organizations offering comprehensive medical care according to a set fee schedule.

Wage increases - which varied among the companies, as they did in the 1986 round of settlements - were generally viewed as moderate by industry observers.

The settlements did not come without difficulty, as four of the companies experienced work stoppages that involved a peak total of 200,000 workers. By early September, the disputes were resolved and the employees were back at work, except at NYNEX Corp. This stoppage began August 6 and involved 60,000 employees of the subsidiary New York Telephone Co. and the New England Telephone and Telegraph Co. It was still in progress when this report went to press.

The companies that settled peacefully with the Communications Workers were Bell South Corp., for 63,000 employees in nine States; US West, for 41,000 workers in 14 States; and Southwestern Bell, for 45,000 workers in five States. The first of the peaceful settlements was between Ameritech's Illinois Bell Telephone Co. unit and the Brotherhood of Electrical Workers. The July tentative settlement was ratified, but some of the 12,900 workers refused to cross the picket lines of 3,000 employees represented by the Communications Workers who struck Illinois Bell at the same time that employees represented by the Communications Workers struck the five other Ameritech subsidiaries: Indiana Bell Telephone Co., Michigan Bell Telephone Co., Ohio Bell Telepho|e Co., Wiscwnsin Bell, and Ameritech Services, a supply and distribution unit.

* An immediate4-percent general wage increase, followed by 1-percent increases in August of 1990 and 1991.

* Additional wage increases to some employees resulting from job reclassifications.

* Possible cost-of-living adjustments in August of 1990 and 1991, under the existing formula of 0.8 percent for each 1.0-percent of any rise in the BLS Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) between 3 percent and 8 percent during the preceding 12 months.

*Revision of the Team Incentive Award plan to provide for "standard" payments to employees in March of 1990, 1991, and 1992 equal to 2 percent (was 1.5 percent) of each employee's pay during the preceding year. The actual lumpsum payments range from nothing to 225 percent of the standard amount, depending on the success in meeting customer service and company revenue and net income objectives.

*A new Employment Security Partnership to provide training and retraining

4 for employees, funded by Bell South at a rate of about $130 a year for each employee.

*A $15 increase in the $150 annual deductible for health benefits and a $50 decrease in the $450 family maximum.

*A 6-percent increase in pension rates, effective in January 1990.

Southwestern Bell. At Southwestern Bell Corp., the August accord provides for:

*An August 1989 monetary gain equal to 5.25 percent of each employee's yearly wage, in the form of a $1,000 lump-sum payment and the balance as a wage increase. This will be followed by wage increases in August of 1990 and 1991 of 2.25 percent for employees at top pay steps and proportionately smaller amounts for those in lower steps.

* Possible cost-of-living adjustments in August of 1990 and 1991 based only on that part of any rise in the BLS CPI-W between 2 percent and 6 per] percent during the 12 months ending in May. The adjustment rate is 55 cents plus 0.65 percent of the worker's pay rate in the prior year for each percent increase in the CPI-W. Any resulting amounts will be "annualized", with the first $400 paid in lump-sum and the balance as a wage increase. Under the previous formula, only the 2- to 4-percent portion of a rise in the CPI-W was compensable and the entire amount was paid in a lump sum.

* Continuation of company-paid health insurance which was revised to provide some improvements in benefits, and increase in employee deductible and coinsurance obligations.

* Increases in pension rates in each contract year - 3 percent for employees retiring before age 55.4 percent for those retiring between ages 55 and 59 and 5 percent for those retiring at age 60 or later.

US West. Terms of the August settlement at US West include:

* An August 1989 monetary gain equal to 5 percent of each employee's yearly wage, in the form of a $600 lump-sum payment and the balance as a wage increase, with employees at the top of pay steps receiving the largest increase and those in lower steps receiving proportionately less. In August of 1990 and 1991, there will be respective increases of 2.5 and 2.25 percent in top rates, with proportionately smaller increases in lower pay steps.

* Revisions in the team award plan. Under the new approach, employees will receive payments after the close of 1990 and 1991 to 3 percent of their base annual wage if "targeted" profit and customer service goals - weightered equally - are met during the year. The payments can range to a higher maximum limit or down to a nothing. The payments can range to a higher maximum limit or down to nothing, depending on actual profit and service performance.

* Reductions in the number of pay steps for some jobs and in geographic wage zones, resulting in additional pay increases for some employees.

* An immediate 10-percent increase] in pension rates, followed by a 3-percent increase in January 1991.

* Continuation of company-paid health insurance, which was revised to include financial inducements for employees to switch to a preferred provider organization.

Pacific Telesis. The Pacific Telesis agreement with the Communications Workers applied to 42,000 employees of its Pacific Bell Telephone Co. in California and 750 employees of its Nevada Bell Telephone Co. The Brotherhood of Electrical Workers negotiated] similar terms for 2,500 employees in the two States. Terms for workers represented by the Communications Workers include:

* Average wage increases of 3.1 percent effective immediately, 3.7 percent in August 1990, and 2.6 percent in August 1991.

* Increased lump-sum incentive payments.

This accord was rejected by members of the Communications Workers, leading to changes in the lump-sum payments and health insurance, and a revote that was to be completed by December 1.

Ameritech. At Ameritech, the only peaceful settlement was between its Illinois Bell subsidiary and the Brotherhood of Electrical Workers. Major terms of the later settlement between Illinois Bell and the Communications Workers were similar to those negotiated by the Brotherhood of Electrical Workers, and include:

* A monetary allocation equal to 5 percent of base annual pay, with $1,000 of the amount paid in a lump sum and the balance paid as a wage increase. A ratification payment equal to 2.5 percent of base annual pay also was paid immediately. In July of 1990 and 1991, the employees will receive 2-percent wage increases plus possible cost-of-living adjustments up to 0.75 percent - equal to three-fourths of that portion of any rise in the BLS CPI-W between 4.5 percent and 5.5 percent.

* Revision of the Success Sharing Formula to provide for lump-sum payouts of up to 1.2 percent of base annual pay in 1991 and up to 2.4 percent in 1992 (formerly 1.1 percent) if the profit and customer service goal is met. Larger or smaller payouts are possible.

* Effective January 1990, a maximum 10-percent (of base annual pay) employee investment in the Savings and Security Plan (formerly 6 percent), with the company matching 60 percent (formerly 50 percent) of the amount.

* A 13-percent increase in pension rates, with employees now having the option of taking their benefit in a lump sum.

* A new company-finance Gateway to Learning program to help employees set career goals and achieve them. Participating employees will receive up to $2,200 a year in counseling, testing, and tutition aid.

The Communications Workers work stoppage at the five other Ameritech operating companies - also including 3,000 employees the union represents at Illinois Bell - began August 12. All of the employees stayed out until the last of the settlements, with Michigan Bell on August 30. This company-by-company bargaining approach contrasted with that at the other regional companies where all major wage and benefit provisions were negotiated at one bargaining table, leaving only local issues for later resolution. Ameritech contended that its approach was necessary because of the need to deal with varying financial and operating conditions among its subsidiaries.

The Ohio Bell contract provides for:

* A signing bonus equal to 2 percent of the employee's base annual pay and an immediate 2-percent wage increase, followed by wage increases totaling 3 percent in 1990 and 3.5 percent in 1991.

* Improvements in vision and dental care benefits.

* A 13-percent increase in pension rates.

* A company contribution to the savings plan equal to 60 percent (formerly 50 percent) of each employee's investment.

At Indiana Bell, the Communications Workers agreed to:

* A 2.5-percent (of annual pay) lump-sum and a 2.5-percent wage increase, both payable immediately, followed by a 2.25-percent wage increase in August of 1990 and a 2.5-percent increase in August of 1991.

* Termination of the cost-of-living adjustment clause. To possibly compensate for this, the provision for annual Success Sharing payments was revised to provide that a portion - 0.5 percent of base annual pay - be applied as a wage increase if the standard or target is exceeded by 160 percent or more.

* A 13-percent increase in pension rates, with employees given the option of lump-sum payments in lieu of monthly benefit payments.

* A company contribution to the Savings and Security plan equal to 60 percent (formerly 50 percent) of each employee's investment. The investment was raised to 10 percent of earnings, from 8 percent.

The Wisconsin Bell contract provides for:

* A signing bonus equal to 2.5 percent of each employee's annual wage and an immediate wage increase ranging from 2.5 percent of maximum pay progression rates to no increase in starting rates. In the second and third years, wage increases will range from 2.5 percent at the top of progressions to 1 percent at the beginning. If financial and service performance goals are met, employees will receive additional 0.5-percent wage increases by March 15, 1990, 1991, and 1992.

* Possible employee performance bonuses equal to a week's pay in March fo 1990, 1991, and 1992. These lump sums also are contingent on meeting financial and service performance goals.

* Improved job security, including a new Building Employment Skills for Tomorrow program to provide employee counseling and training for new jobs.

* A 13-percent increase in pension rates and a new option to take the benefit in a single lump sum.

* Formulation of a joint health care cost containtment committee, improvements in a number of health benefits, and a requirement that employees pay the full cost of coverage for certain dependents enrolled after September 1, 1989.

* A company contribution to the savings and security plan equal to 60 percent (formerly 50 percent) of each employee's investment, which was raised to 10 percent (formerly 6 percent) of earnings.

At Michigan Bell, the Communications Workers agreed to:

* Wage increases of 2 percent effective immediately, 2.5 percent in September 1990 and 3 percent in September 1991, and a lump-sum immediate payment equal to 3 percent of base annual pay.

* A revision of a Team Performance Award plan guaranteeing that payments to workers after each plan year will at least equal 1 percent of their annual wage, even if goals are not met. Another change provides for wage increases, after each plan year ranging from 0.1 percent if achievement is 130-134 percent the goal to 0.5 percent if achievement is 15-200 percent of the goal.

* Combination of the health plans for management and nonmanagement employees, with no changes in deductibles and coinsurance payments. There also were improvmements in benefits.

* A 13-percent increase in pension rates, a new employee option to take their benefit in a lump sum if it amounts to more than $3,500, and upgrading of some pension "bands," resulting in larger entitlements.

* A company contribution of its stock to the savings and security plan equal to 60 percent (formerly 50 percent) of each employee's investment.

* New flexibilities in scheduling excused work days, vacatins, educational leaves, and workweeks. Bell Atlantic. At Bell Atlantic where a work stoppage began August 13, the Communications Workers settled on "regionwide" issues on August 17, but there was no back-to-work movement because the individual subsidiary companies still had not settled onlocal issues. The last of the tentative local accords was reached in late August when the union settled with Bell of Pennsylavania and Diamond State Telephone Co. of Delaware. This triggered a return to work in Bell Atlantic's six State in Washington, DC, region, except in New Jersey, where 5,400 employees remained out until September 5, when the Brotherhood of Electrical Workers settled on all issues for the 9,000 workers it represents in New Jersey. The union also settled with Bell of Pennsylvania for the 2,000 workers it represents in that State.

The regionwide terms for workers represented by the Communications Workers include:

* A 3-percent wage increase effective immediately and 2.25-increased in the second and third years.

* Possible profit-sharing payouts in each of the 3 years.

* Conversion of health care coverage to a preferred provider organization approach.

* A 13-percent increase in pension rates for future retirees and a 6-percent increase for current retirees.

* An employer match equal to two-thrids (formerly one-half) of each employee's investment in the savings plan.

The Brotherhood of Electrical Workers accords with Bell of New Jersey and Beel of Pennsylvania provide for essentially the same terms as the Communications Workers settlements.
COPYRIGHT 1989 U.S. Bureau of Labor Statistics
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1989 Gale, Cengage Learning. All rights reserved.

Article Details
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Title Annotation:developments in industrial relations
Author:Ruben, George
Publication:Monthly Labor Review
Date:Nov 1, 1989
Previous Article:Significant decisions in labor cases.
Next Article:Investing in People: Strategy to Address America's Workforce Crisis.

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