BRATTLEBORO — It was an unusual site for a labor rally.
In the parking lot of Fast Eddie's ice cream stand on Putney Road, about 60 FairPoint Communications workers and their family members gathered around a 12-foot-high inflatable rat to call attention to the lack of progress toward a new labor contract.
Representatives of the Communications Workers of America (CWA) Local 1400 and International Brotherhood of Electrical Workers (IBEW) Locals 2320, 2326, and 2327 have been in negotiations with FairPoint management since late April and have yet to reach an agreement.
The contracts of approximately 2,000 union employees in Maine, New Hampshire, and Vermont expire Aug. 2. Some 450 Vermont workers are in the bargaining unit.
Mike Spillane, business manager of IBEW Local 2326 in Vermont, is part of the negotiating team. He told Vermont Public Radio on July 25 that the two sides are far apart and that a strike may be necessary if there is no progress this week.
Earlier in July, union members voted overwhelmingly in favor of a walkout.
So why was “Scabby the Rat” standing in front of a creemee stand? Ed and Susan Cogliano of Dummerston, owners of Fast Eddie's, were asked by a couple of local FairPoint workers if they could hold a rally there, and they readily agreed.
“The middle class is getting squeezed hard,” Ed Cogliano said. “Somebody has to stand up and fight.”
Cost-cutting plans
FairPoint, headquartered in Charlotte, N.C., operates in 17 states. It bought the land line operations of Verizon in Vermont, New Hampshire, and Maine in 2008. FairPoint filed for Chapter 11 bankruptcy a year later.
The company has cut about a fifth of its workforce since emerging from bankruptcy in 2011. It is battling a steady decline in customers, as more people drop land lines in favor of cell phones. The company has tried to make up for that through building out its broadband Internet offerings.
The company posted net losses of $415 million in 2011, $153 million in 2012, and $103.5 million in the last fiscal year.
FairPoint CEO Paul H. Sunu has proposed what he called a four-pillar strategy for increasing value in the company's shares: improve operations, change the regulatory environment, execute its human resources strategy, and stabilize its revenues.
In a quarterly conference call to investors in May, Sunu said that strategy includes freezing a defined-benefit pension plan, discontinuing post-retirement health care benefits for active employees, moving bargaining unit employees to the contributory benefit plans available to other employees, cutting its financial obligations if it lays off workers in the future, and changing various work rules “to allow us to more effectively serve customers.”
Under their current five-year contract, union workers receive full health care premium coverage and defined benefit retirement contributions, and unlimited sick days.
For management employees, FairPoint covers 75 percent of health care and the first 5 percent of 401(k) retirement savings plans.
Workers at Friday's rally, who did not wish to be identified for fear of reprisals by FairPoint management, say the company is seeking pay cuts of up to 30 percent, a sharp increase in the cost of health insurance for employees, and the dilution of their retirement plan.
FairPoint says that the current worker benefits are out of line with what their peers get at other telecommunications companies. The CWA and IBEW workers say FairPoint is trying to drive down wages and benefits to the levels of non-unionized companies.
FairPoint says it is prepared for a strike.
'We paid for it'
Former Vermont AFL-CIO head Ron Pickering of Brattleboro and current Vermont AFL-CIO political director Dennis LaBounty spoke to the FairPoint workers.
Pickering said that, in his experience, when a company presents “a laundry list of concessions” for workers to accept, the first question to ask is whether the company is in trouble and needs help to stay alive.
He said FairPoint hasn't been forthcoming about its true financial state and that management has not offered to make similar wage and benefit concessions.
“The pay and benefits and pensions that we've gotten over the past 30 years weren't given to us,” Pickering said. “We paid for it. You're fighting for all workers in Vermont.”
LaBounty echoed those sentiments.
He cited the Chittenden County Transportion Authority strike earlier this year in Burlington, where drivers eventually won a new contract with the support of other unions and the community.
“Solidarity is how progress gets made and things get done,” he said.