FairPoint Communications workers in Maine, New Hampshire and Vermont have known it had to come to an end. Terms of their Verizon contract had carried over when FairPoint purchased the company's land-based telephone operations and had been mostly unchanged for 10 years. Workers knew FairPoint, which is struggling to become profitable, would want to save money by reducing benefits.
But compromise has been elusive over four months of negotiations.
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"We get that FairPoint doesn't have the deep pockets that Verizon had. But we just want to come up with something that's fair and equitable," said Pete McLaughlin, chairman of the unions' bargaining committee.
More than 1,700 workers represented by the International Brotherhood of Electrical Workers and Communication Workers of America are now on standby for a possible strike after FairPoint announced an impasse.
Effective Thursday morning — four days before Labor Day — FairPoint imposed its final offer.
The plan freezes the existing defined benefit pension plan, allows the company to hire contractors, eliminates retiree health care benefits for current employees and requires workers to share some health care costs for the first time.
The unions, which accused FairPoint of violating federal law, said the company has not been bargaining in good faith and asked the National Labor Relations Board to reinstate the contract that expired Aug. 2.
The union said there's no impasse, even though there's been little headway since negotiations began in April. The company said that it must reduce labor costs and that it's willing to listen to further proposals by the unions.
In Hawaii, where a similar fight played out after Verizon divested itself of its land-based assets, it took 18 months for the new company and unions to reach an agreement, said Barry Sine, an analyst at Drexel Hamilton, a New York-based brokerage firm.
The stakes are high in Maine, New Hampshire and Vermont.
"You clearly don't want to see either side lose. The workers are so vital to the company, and the company is so vital to the economy of New England. But at the same time, you have to adjust to the economic realities to return value to shareholders," Sine said.
Hawaiian Telcom ultimately imposed its final offer after fruitless negotiations and a two-day strike. The union went to the NLRB but lost. These days, the company is busy hooking up customers to its expanded fiber-optic network, Sine said.
For FairPoint, large customers are likely thinking twice about buying or upgrading service because of the current labor strife, but the company should be well-positioned to grow once there's an agreement, Sine said.
"Once this is all resolved, I'm very optimistic. They have a great region to serve and the workforce is just incredible. I think work will accelerate once you remove labor issues," he said.
In northern New England, the unions say they expected to make some concessions. FairPoint didn't press hard during the last negotiations because the company was in bankruptcy.
The North Carolina-based company has struggled since emerging from bankruptcy in 2011. It has yet to reverse net losses posted for every year of operation since it bought Verizon's land-based telephone holdings in northern New England for $2.3 billion in 2007.
The unions say FairPoint hasn't been playing fair.
McLaughlin said the negotiations have been one-way, with no counter offers from the company in recent weeks. The latest union proposal, he said, would have saved the company $200 million.
"We understand that we're at the top of the heap and need to make adjustments. But we need a partner to come up with these adjustments. FairPoint is not doing it," McLaughlin said.