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Verizon Workers Set Strike Deadline

Not satisfied with the progress made on negotiations for a new labor contract, two unions representing 65,000 Verizon Communications Inc. (NYSE: VZ) employees are preparing to go on strike if a deal is not reached by the end of Sunday.

Verizon's contract with two unions -- the Communications Workers of America (CWA) and the International Brotherhood of Electrical Workers -- expired on August 3, but the unions agreed to keep working under the old contract while a new one was hammered out. The decision to keep working was based on positive progress being made in negotiations that suggested a satisfactory deal would be reached soon.

But the unions say progress since then has been slow and that key issues like job security and healthcare remain unresolved. Now they've set a new deadline to put pressure on Verizon to get a deal done.

The unions say strike action "becomes possible if a fair settlement is not reached" by 12:01 a.m. on Monday morning, at which point a "strike date will be set by the two union presidents in consultation with the bargaining committees."

Verizon is playing it cool. "We're a little surprised because we think we've resolved a lot of the issues," says Eric Rabe, a Verizon spokesman, who points out that a strike is only a possibility come Sunday, giving the unions wiggle room to take alternative action, including engaging in further talks.

Most of Verizon's union employees work on the wireline telephony side of the business, which includes the carrier's FiOS Internet and TV services. Verizon Wireless on the other hand, employs few union workers. Verizon claims any strike action won't cause delays to FiOS installations or halt repairs to existing copper lines. (See Verizon: Labor Strike Won't Affect FiOS.)

Job security has become tough to guarantee on the traditional wireline side of any telco's business, as phone companies around the world see their wireline subscriber numbers and revenues eroded quarter by quarter. (See Carrier Scorecard: What Recession?.)

Such losses have already resulted in layoffs at Verizon and other U.S. carriers. (See Qwest Cuts More Jobs and You're Fired.)

Verizon's number of union workers has declined as well: The carrier had 85,000 union workers covered by the current contract when it was negotiated in 2003.

The last time Verizon's union staff took strike action was in 2000, when workers picketed for 18 days before reaching an agreement. The strike had Verizon backed up for a month on orders and repair requests.

This time, the telco says it's much more prepared to deal with a work stoppage with legions of retired workers, contractors, and non-union workers in western states prepared to fill in in the event of a strike.

It also expects a deal to be reached very shortly without any work stoppages. "This has been as constructive a negotiation as any I can remember," says Rabe.

— Raymond McConville, Reporter, Light Reading

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