Proposing a solid wage increase up front, Verizon held its first negotiating session today with representatives of the Communications Workers of America and the International Brotherhood of Electrical Workers on contracts covering approximately 38,000 Verizon East Wireline Employees. The proposed wage increase is part of a competitive and comprehensive three-year offer submitted by Verizon to address issues that would help propel the company’s Wireline unit in the digital age.

“Our goal this contract cycle is simple: To work from day one with union leaders on ways that will help our Wireline business succeed, in an ever-changing communications arena, in the years to come,” said Robert Mudge, Verizon’s executive vice president for wireline operations. “We’ve put a comprehensive offer on the table to encourage a substantive and productive dialogue on the issues as early in the process as possible. We are committed to negotiating meaningful changes.”

The company’s comprehensive offer includes several key proposals:

• Wages – Provided there is a signed agreement by Aug. 1, upon ratification of a new contract there would be a 2 percent wage increase effective Aug. 2, 2015; a 2 percent increase one year later; and a $1,000 lump sum payment in the third year. The average annual salary and benefit package for a Verizon associate in the East is $130,000.  Verizon technicians in the New York City/Long Island region currently have an average total wage-and-benefit package worth in excess of $160,000 a year.

• Pensions – Pension-eligible associates would be given a choice of continuing to earn pension benefits under the defined benefit plan with some limitations and forgoing the existing 401(k) company match, or opting for the enhanced 401(k) plan currently offered to management employees (which includes a bigger company match and a profit-sharing contribution) with a frozen pension benefit. With the exception of union-represented employees hired since Oct. 28, 2012, employees under these collective bargaining agreements currently have both a defined benefit pension plan AND a 401(k) savings plan with a generous company match, a benefit structure that’s from another era.

• Healthcare – Negotiating cost controls for the company’s healthcare plans is essential. The cost of medical coverage for an East associate and one or more family members currently averages nearly $20,000 a year. In one of the company’s East plans, the annual cost for this coverage is over $23,000 annually. By contrast, the national average for family healthcare coverage is about $16,800. The company is proposing an increase of $8.10 per week next year for individual healthcare premiums. Other reasonable cost controls are also important to help keep this Wireline business unit competitive.

• Workforce management – The company is seeking more flexibility in terms of managing the workforce consistent with customer demands.  

Verizon’s union-represented employees in the East work under 27 collective bargaining agreements in nine Eastern states and Washington, D.C. The current contracts expire Aug. 1, 2015. Negotiations can be lengthy. The process lasted 15 months in 2011-12.