Tentative Bargaining Agreement Summary. Between. FairPoint Communications. and. IBEW, Locals 2320, 2326, & 2327
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1 Tentative Bargaining Agreement Summary Between FairPoint Communications and IBEW, Locals 2320, 2326, & 2327 Revised
2 TABLE OF CONTENTS Key Provisions Wages and Compensation Employee Benefits Other Provisions Disclaimer This summary briefly describes a number of the key collective bargaining changes negotiated between FairPoint and the IBEW on behalf of its Locals 2320, 2326, and This document is only a summary and does not describe all aspects and all details of the matters that have been tentatively agreed to. The Company and the Union will issue a joint memorandum that will provide a complete description of such matters. 2
3 Key Provisions The Agreement, if ratified, between FairPoint and Locals 2320, 2326, and 2327 of the IBEW will include the provisions found in the 2003 Verizon/IBEW collective bargaining agreement modified by the changes or additions outlined below. The Agreement would be effective until August 3, The essential elements of the proposed contract are presented in summary fashion below: Wage increases of 15% over the next five years ( ). Improved cost of living formula. Pension band increases for active employees of nine percent plus two band increases over five years. Wage Table 31 (Note 4) reduction of one pension band effective July 31, 2008, is eliminated. Lump-sum pension cash out available for separations from service thru August 2, 2008, January 1, 2009 to June 30, 2012, and January 1, 2013 to August 3, Corporate Profit Sharing awards with a minimum payout of $700 in 2009, 2010, 2011, 2012 & Establishment of a 401K with cash match & no increase in administrative or management fees. Neutrality & card check recognition Provisions regarding recognition of FairPoint start-ups or acquisitions Establishment of a Joint Management IBEW - CWA Work and Family Committee with a yearly fund of $425,000, a start up amount of $60,000 and $25,000 from the fund will be applied toward the salary of one full-time IBEW member. 3 Medical benefit Changes - Retiree healthcare caps expand - in-network office visit costs increase - MEP, PPO & Indemnity annual deductibles increase - MEP, PPO, & Indemnity out-of-pocket maximum increases - Rx plan out-of-pocket maximum increases Restriction on transfer of jobs The Agreement will be binding upon successors and assigns of the Company under specific conditions Procedures for contract work Disagreement Resolution Process for disputes arising under the transfer & application of the Agreement Establishment of a Benefits Coordinator position. Company to hire one internal EAP Counselor Hiring preference for IBEW members at other FairPoint Companies. $250 ratification bonus August 3 rd, 2008 & 2009
4 Wages and Compensation 1) Ratification Bonus On August 3 rd, 2008 & 2009, each active employee will receive a lump sum of $250. 2) Basic Wage Increases The schedule of wage increases for the term of this agreement will be as follows: Effective Date Increase Applied to Sunday, 8/3/08 3% All steps of the basic wage schedules Sunday, 8/2/09 3% All steps of the basic wage schedules Sunday, 8/8/10 3% All steps of the basic wage schedules Sunday, 8/7/11 3% All steps of the basic wage schedules Sunday, 8/5/12 3% All steps of the basic wage schedules 3) Cost of Living Based upon the Consumer Price Index, there may be cost of living increases in 2011 and ) Corporate Profit Sharing (CPS) CPS will provide awards for results in calendar years 2008, 2009, 2010, 2011 and 2012 with awards payable in 2009, 2010, 2011, 2012 and The minimum distribution will be $700 in each year. 4
5 Employee Benefits 1) Pension Pension bands will be increased as follows: Effective Date Percent / Band Increase 10/1/08 3% 10/1/09 Increase all Pension Bands by One 10/1/10 3% 10/1/11 Increase all Pension Bands by One 10/1/12 3% Lump-sum cash outs will be available for separation from service during the following periods: a) through August 2, 2008, b) January 1, 2009 to June 30, 2012, and c) January 1, 2013 to August 3, Wage Table 31: Remove note 4 reducing the pension band. Maintain band as is. The Company will meet with the Union annually to review performance of pension assets. 2) Retiree Healthcare All changes are effective January 1, 2009 unless otherwise noted. For plan years 2009 through and including 2013, the Company shall pay 100% of the cost of coverage for the Coverage Category elected. Plan years beginning on and after January 1, 2014, post 1/1/92 retirees will pay any excess above the following revised caps: Coverage Category Pre-Medicare Medicare Eligible Retiree $13,000 $7,100 Retiree + 1 $26,000 $14,200 Retiree + Family $32,500 $21,000 5
6 3) Active Employees Medical Benefits HCN - The office visit co-payment will increase to $20.00 on January 1, 2009 and will remain at that level throughout the 2013 plan year. MEP - Aetna MEP PPO: In-network office visits will be covered at 100% after a $15 co-pay for the 2009 Plan year, the co-pay will increase to $20 on January 1, 2010 and increases again to a $25 co-pay on January 1, For the MEP PPO and Indemnity, the annual deductible and out-of-pocket maximum shall be a per individual deductible as follows: January 1, 2009 $250 January 1, 2010 $300 January 1, 2011 $300 January 1, 2012 $350 January 1, 2013 $350 The family deductible will remain at two-and-one half times the applicable individual deductible. - The current out-of-pocket maximum for the MEP PPO and Indemnity shall increase as follows: January 1, 2009 $700 January 1, 2010 $750 January 1, 2011 $750 January 1, 2012 $800 January 1, 2013 $800 - The annual out-of-pocket maximum for the MEP PPO and Indemnity prescription drug plan shall be increased as follows: January 1, 2009 $300 January 1, 2010 $350 January 1, 2011 $350 January 1, 2012 $400 January 1, 2013 $400 6
7 4) 401K The matching contribution after close will be in the form of cash Existing Verizon stock will be treated in the Plans as Exit Only The Company will not assess any administrative or management fees beyond what the associates currently pay in the Verizon plan The ESOP feature will be removed moving forward Publically available funds will be chosen Company will meet with the Union annually to review 401k Investment Options, Selection of Funds and other 401k items. 5) Work and Family A Joint Management / IBEW / CWA Work and family Committee will be established to disburse an annual amount of $425,000. The fund will start with an initial $60,000. The fund will provide $25,000 towards the salary of one full-time IBEW representative. The salary of the Management position will be paid by the Company. 7
8 Other Provisions Neutrality and Card Check Recognition The agreement will cover the region of Maine, New Hampshire, Vermont, Rhode Island, Massachusetts and New York. Card check procedures will be established. The Company agrees to remain neutral during the limited campaign. Transfer of Jobs The Company may not permanently transfer IBEW or CWA represented jobs to any entity which is not a signatory to this agreement. Successor Agreement The Agreement will be binding upon successors and assigns of the Company under specific and limited conditions. Contract Work When emergency conditions exist (A P3.06) and its necessary to supplement OPT and SST work the following procedures will apply in order of priority: - FairPoint unionized operations in ME, NH & VT - FairPoint unionized operations in NY - Assistance will be requested from Verizon Mass., R.I., and N.Y. - Work will be contracted as required Benefits Coordinator The Company will establish and the Union will designate one bargaining unit employee to fill the position of Benefits Coordinator. Employee Assistance Program Counselor The Company will hire one internal EAP Counselor to work solely with active employees and their eligible family members Disagreement Resolution Process The resolution for disputes arising under the transfer and application of this extension Agreement shall be by mediation and binding arbitration. New Business Procedures have been established for union recognition at new businesses that FairPoint acquires or starts-up in ME, NH, VT, MA, RI and NY. 8
9 Hiring Preference Agreement IBEW represented employees at other FairPoint companies given preference for job vacancies before jobs are hired from the street. Duration This agreement shall become effective on April 1, 2008, and will remain in place until 11:59 p.m. on August 3, Provisions Not Included in Original Summary The IBEW will hold grievances from March 24, 2008 until April 2, 2008 to allow Labor Relations time to move from Verizon responsibility to FairPoint. This time will be excluded from Article G8 time limits. P4.05 Call Out Allowance will increase 5% on Jan. 1, 2009 and again on Jan. 1, 2011 P15 Expense and Travel Time will increase 5% on Jan. 1, 2009 and again on Jan. 1, 2011 P16 Expense and Travel Time will increase 5% on Jan. 1, 2009 and again on Jan. 1, 2011 Operator Wage Table 51 removed from contract (this was the lower scale). Trial Program For 90 days, commencing April 1, 2008, all non-disciplinary grievances will be brought directly to third step through weekly meetings in an attempt to develop new and better union and company relationships and procedures. Any unsolved grievance from this method will move directly to arbitration. P16 Expense and Travel for E.I. only changed language and treatment: When employee is assigned to a location over 50 miles from the employee s headquarters travel point, and is entitled to a per diem allowance, THE EMPLOYEE can choose to make one of the following lodging and meal arrangement in lieu of a per diem allowance (language from here remains the same). 9
10 Customer Service Enhancement Letter: FairPoint will refrain from implementing a program of productivity that involves continuous and extensive direct observation of technicians such as the focus tech ten day ride along that Verizon recently tried. 10
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