CWA, Verizon Use Safety as Weapon as Strike Continues

Verizon union workers claimed safety violations by their fill-ins in New York as the East Coast telecom strike continued into its third week. Verizon meanwhile won an injunction to stop alleged acts of sabotage by the union workers represented by the Communications Workers of America. As the standoff continues, analysts told us they didn’t expect a big financial impact on Verizon unless the strike drags on for many more weeks. The telco had warned such effects were possible (see 1604210043).

“Basic safety practices aren’t being followed as unqualified managers and contractors hang cables, place poles and operate heavy equipment throughout the Verizon footprint,” CWA said in a news release Wednesday. That wouldn't be an issue if Verizon signed a “fair contract” with union workers who are striking, it said. CWA said workers documented violations including hazardous hanging of cable in North Tonawanda, New York, unsafe access of a cross-box in the Bronx, and hazardous pole placement in Laurens, New York. “We’re striking to make sure Verizon has the skilled and experienced staff necessary to serve our customers safely,” said Brendan Haugh, a 20-year Verizon field technician who CWA said witnessed fill-in workers unsafely access a small platform next to a cross-box in the Bronx. “They failed to check for hazardous voltage, and then one worker climbed to the top step of a step-ladder, which should never be used to access such a platform, and pulled himself up by grabbing at a metal beam,” CWA said.

Responding to CWA, Verizon praised its nonunion employees: “More than 20,000 non-union Verizon employees are now on special assignment helping to ensure that our customers can connect where and when they need to. Since the strike started, this dedicated workforce has successfully completed more than 80,000 outstanding issues and have helped complete nearly 7,000 Fios installations. They have done great work and we are very proud of their accomplishments.”

The New York Committee for Occupational Safety and Health also raised concerns. Its members include workers, unions, workers’ rights activists and health and safety professionals. “It’s very troubling that Verizon is sending out replacement workers who don’t know how to take the most basic safety precautions,” said Dave Newman, industrial hygienist for the organization. “The evidence shows hazards such as people stringing cable over roads without controlling traffic and equipment left unsecured in trucks that could bounce out on a highway and cause a serious accident. They really are putting people’s lives at risk.”

“There have to be some sort of safety concerns given that you’ve got workers who are typically not out there in the field,” said Standard & Poor’s analyst Angelo Zino in an interview. William Ho, principal of analyst firm 556 Ventures, said in another interview that replacements may be recently trained and don't do this kind of work day-to-day, so it’s possible they “cannot compete against long-time and experienced workers.”

Pointing out safety issues is smart public relations, said Ho. The union is “looking at everything possible to leverage public and regulator opinion,” he said. “Shadowing the replacement managers has always been a strong tactic, whether for keeping managers on their toes or intimidation.” Ho worked previously as a Verizon manager and filled in during multiple strikes; the longest was a New England strike in 1989 that lasted from August to November, he said.

Injunction Against Sabotage

Verizon struck back with an injunction against alleged sabotage.

The New York Supreme Court Wednesday issued an injunction banning CWA union workers from engaging in physical violence, sabotage, vandalism, reckless driving; obstructing traffic; knowingly following Verizon employees; trapping individuals in vehicles or otherwise blocking their movement; blocking the entrance of Verizon sites; interfering with business activities of Verizon through threats, obstruction, intimidation or harassment. It also specifies that picketers must stand at least 15 feet away from any Verizon worksite, employee or contractor, and sets limits on the number of picketers at a location based on the size of the site. Picketing limits don’t apply if police permits are obtained. One of the more colorful rules of the injunction prohibits “Dropping, placing, throwing, spreading or otherwise causing nails, glass, spikes or other objects or debris to be strewn in, on or about Verizon’s driveways, parking lots, entrances, exits, and adjoining roads to Verizon’s facilities, other Verizon work sites, or customer locations.”

In a news release, Verizon said alleged sabotage incidents doubled​ this week. Verizon said it's now investigating 57 such incidents in the five eastern states in its territory, up from 24 reported by the telco last week (see 1604210052). “These are criminal activities, affecting people’s safety and putting lives at risk. We are investigating all reports and pursuing all avenues to assist law enforcement in finding and convicting the perpetrators of these acts,” said Michael Mason, Verizon chief security officer.

“With Verizon executives feeling the effects of our strike, they are resorting to legal maneuvers to try to silence workers rather than address the core issues at stake in these contract talks: saving good middle class jobs, stopping Verizon’s devastating attack on our families and communities, and ensuring high-quality service for all our customers,” said Dennis Trainor, vice president of CWA District One, and Ed Mooney, vice president of CWA District 2-13, in a joint statement. “The injunctions issued today in New York, like those issued in Pennsylvania and Delaware the first week of the strike, will have little effect on our peaceful picketing, and in fact reinforce the standards our members maintain during their orderly protests outside of Verizon and Verizon Wireless facilities.”

Small Financial Impact

While a Verizon executive recently said the ongoing strike could affect Verizon’s bottom line, analysts said Wednesday that Verizon shouldn’t have a major financial problem unless the strike drags on for many more weeks.

“At this point, we don’t expect the labor strikes to have any sort of impact whatsoever on the actual financials,” Zino said. “If this thing gets resolved over the next week or two, we do think that they should be able to offset any of the higher costs that are being seen right now.” But the strike could affect Q2 and full-year earnings numbers if it lasts six to eight weeks, the S&P analyst said. Costs are certain to be higher this quarter because Verizon has managers running the trucks and the company is probably paying extra for overtime, he said. The sales side could feel increasing pressure, with customers potentially getting frustrated with Verizon’s responsiveness as the backlog of jobs grows, he said.

Verizon may not be as vulnerable in this strike as in past strikes when it had more copper, said Ho. Verizon has shed many of its landline properties through deals, and most of the wireline revenue now comes from Fios, he said. "It's a different world than in previous strikes,” he said. "The company can sustain it because it's a smaller footprint relative to the previous days, and a lot of systems for installation are more mechanized.” Repair jobs will likely fill most of Verizon’s backlog, he said. “It never really is the same once you're in a strike environment in terms of operations," but Verizon still has trained personnel doing the work, he said.

Zino said his initial prediction was that the strike would be finished after two weeks, but he still believes it could wrap up in the next week or two. “We’re starting to get to a point now where both sides … would like to get this resolved sooner than later,” he said. “The question is who’s more willing to give up what they want.”