Cases & Deals

Verizon successfully resolves arbitration matter involving alleged violation of EISP provisions

Clients Verizon Pennsylvania Inc. and Verizon Delaware Inc.

Jones Day represented Verizon Delaware Inc. and Verizon Pennsylvania Inc. in an arbitration brought by the Communication Workers of America ("CWA") concerning Verizon's method of offering Enhanced Income Security Plan ("EISP") benefits to employees. EISP benefits provide Verizon employees with a substantial monetary incentive to voluntarily leave the workforce. The CWA objected to Verizon's long-standing practice of targeting EISP offers to employees based not only on job title and work location, but also on organization or work group.

This same issue had been the subject of previous grievances and litigation. In a 1997 Pennsylvania arbitration, Arbitrator Jeffrey Tener found that the parties' collective bargaining agreement ("CBA") authorized the targeting of EISPs based on organization or work group. In 2002, the issue again arose after Local 827 of the International Brotherhood of Electrical Workers ("IBEW") filed a complaint in the U.S. District Court in New Jersey. IBEW Local 827 obtained a favorable ruling from the New Jersey District Court, which was affirmed on appeal by the Third Circuit.

In light of the Third Circuit decision, the CWA in Pennsylvania brought an action challenging the targeting of EISP benefits in the U.S. District Court for the Eastern District of Pennsylvania, which the parties settled by referring the dispute to arbitration. Arbitrator John Sands rejected the Union's attempt to re-adjudicate an issue that had already been decided by Arbitrator Tener. Relying on the terms of the parties' CBA and prior arbitral precedent between the parties, Arbitrator Sands ruled that the earlier arbitral award was a reasonable interpretation of the CBA and thus placed a gloss on the EISP provision's meaning. The parties could not modify this meaning without a negotiated change. The Union failed to do so in CBA negotiations that followed the Tener Award, and the award was therefore found controlling. Arbitrator Sands also rejected the Union's attempt to have the New Jersey decision supersede the Pennsylvania arbitration award, since the New Jersey decision dealt with different union and corporate parties and a different factual record.

In the Matter of Arbitration between Verizon Pennsylvania Inc. and Verizon Delaware Inc. and Communications Workers of America District 13, AFL-CIO, JS Case No. 3706, Verizon No. 0132-07, CWA No. 13-07-175V