Verizon Communications plans to suspend health-insurance coverage and medical benefits for any worker still on strike, applying further pressure on employees who have been off the job for more than a week.
It's the latest escalation in a contract dispute between telecommunications workers facing competitive pressure on its legacy landline business and workers who don't want their benefits stripped away. The disagreement over benefits has caused 45,000 employees in the Northeastern and Mid-Atlantic regions to, and has resulted in accusations of .
The latest move will test the mettle of the workers, who have been without pay since the strike began. The loss of health benefits is an option that companies have when their workers go on strike. While the talks continue, neither side has reported any progress.
Verizon confirmed that the letters were sent out. Representative Robert Varettoni said the notices were sent as early as possible so workers could make the necessary alternative arrangements. He added the rules of how the benefits can be suspended are laid out in the contract.
"This is not a surprise to the unions," he said.
The news of Verizon's threat to strip the benefits away was first reported by Dow Jones Newswires.
The unions representing the workers, the Communications Workers of America and the International Brotherhood of Electrical Workers, have issued advice on how to keep their medical benefits going. The Consolidated Omnibus Budget Reconciliation Act (COBRA) requires group health plans to offer striking workers and covered dependents the opportunity to continue health coverage for up to 18 months by paying for the coverage out of their own pocket. COBRA gives workers up to 60 days to decide if they want to continue coverage, it and gives them another 45 days to pay the premium.
Strikers also have the option to pay for their core medical benefits, or choose to pay just for themselves or their dependents.
The CWA said it would make available the Robert Lilja Members Relief Fund for workers who need assistance paying for their health care needs. In the meantime, it said it is readying a petition to be sent to Verizon Chief Executive Lowell McAdam, urging him to "get serious about bargaining and stop trying to push Verizon workers out of the middle class."
The union said the petition has more than 100,000 signatures. CWA representative Candice Johnson said the petition has spurred many groups into action.
The strike has gotten uglier, with Verizon taking legal action to stop workers from blocking the entrances to facilities, and harassing management and replacement workers sent in to man the facilities. It has injunctions in New York, Pennsylvania, New Jersey, and Delaware, as well as a temporary restraining order in Massachusetts, where an injunction is pending.
Johnson said the CWA doesn't condone any illegal action.
Increasingly, union workers are.
The workers are striking because of what it feels are unfair concessions to its contract. Verizon wants freeze pensions, tie pay to compensation, make it easier to fire workers, and require employees to contribute to their own health benefits. Executives have said the cuts are necessary for the landline business to remain competitive with that of the cable operators, who don't have union workers.
The unions have dismissed the calls for changes in the contract, and they note that Verizon remains a highly profitable company.
Much of the profits, however, are generated from the wireless business, which has nearly no union workers. The wireline business posted a 0.3 percent decline in revenue in the second quarter, compared with a 2.2 percent decline in the first quarter. One growth area, however, has been its Fios bundle of Internet, phone, and television service. But Verizon said the costs to run the business are higher because of the need to strike content deals.