Frontier Communications workers plan to picket Sunday, Aug. 15 in Hemet, alleging the company wants to reduce employee benefits and is failing to offer cost-of-living raises and hazard pay hikes during the pandemic while its executives have received nearly $38 million in bonuses.
The employees, represented by Communication Workers of America, have been mobilizing with growing numbers in the Inland Empire as labor negotiations continue. As many as 500 workers are expected to attend Sunday’s informational picket.
The CWA members, which number around 2,000 throughout California, are seeking significant wage increases over the life of the new labor contract, according to Don Ruiz, who co-chairs the union’s bargaining committee.
“Frontier is not keeping up with the Consumer Price Index and the cost of living,” he said. “These employees are the ones who kept this company growing and moving forward while Frontier was in bankruptcy and they deserve to be recognized for that.”
Chapter 11 filing
Frontier filed for Chapter 11 protection in April 2020, claiming issues with integrating recent acquisitions (including Verizon assets in three states), “fierce” competition, changing consumer preferences and the need to upgrade from copper cables to optical fiber had rendered its $17.5 billion in funded debt “unsustainable.”
The filing was part of Frontier’s restructuring plan to cut its debt by more than $10 billion.
“The notes came due and the company was not able to make payments,” Ruiz said.
CWA’s current labor contract was extended in 2020 as the telecommunications firm grappled with its bankruptcy. The extension expires Sept. 4.
Data from PayScale.com show Frontier network engineers average $23, while field service technicians average $28, customer support analysts average $29 and cable splicers average $36 an hour.
In a statement released Thursday, Frontier said it hopes to reach a mutually acceptable agreement.
“We’re currently negotiating with the CWA, so it would be premature to dive into the details,” the company said. “We hope to reach an agreement soon that’s fair to our employees and strikes a balance between their needs and the highly competitive realities of our business.”
Executive bonuses
A New York bankruptcy judge approved nearly $38 million in executive bonus payments a month after Frontier’s bankruptcy filing, saying the boosted pay appeared to be in line with industry standards and was not earmarked for company insiders, according to a Law360 report.
The bonuses were approved over an objection from the U.S. Trustee’s Office after hearing that two creditor groups had dropped their own objections when Frontier agreed to adjust the payment schedule.
At that May 2020 hearing, Frontier counsel Stephen Hessler said the bonuses would be divvied up among 390 middle management employees, with each receiving $30,000 to $233,000.
The payout included $14.7 million in employee retention bonuses, up to $21 million in incentive bonuses based on the company’s financial performance, and $2 million set aside to add newly hired employees or make other payments the company deemed necessary, Hessler said.
Ruiz said CWA recently won an arbitration hearing that proved Frontier was outsourcing jobs to India, a move that saves the company money but violates the union’s collective bargaining agreement. Frontier is also using in-state contractors for some of its service work, he said, which impacts customers.
“You’re talking about contractors who are not trained,” he said. “And these people are going into customers’ homes with no security vetting.”
Ruiz is hoping for an agreement both sides can live with.
“The negotiations started off pretty negatively, but we’ve had some progress,” he said. “The employees are fighting for fair pay and benefits, but also for good quality customer service. We are fighting for the customers as well.”
