Introduction
On May 15, 2005, at approximately noontime, about two hundred NSTAR workers in Massachusetts went on a strike. Following this, on May 16, two thousand NSTAR oil and gas workers went on a strike against the firm on the pretext that their demands were not being met. They picketed outside NSTAR’s facility on MacArthur Drive and refused to go back to work. They used tactics to gain attention of the public. A union member union member, Wayne Lima, was reported to be flashing the photos of his 9- and 5-year-old daughters and yelling to any NSTAR worker who passed by: ‘This is what it’s all about! Equal distribution of wealth!’ (Goren, Daniel E., May 2005).
The employees claimed that they were heavily overworked. They claimed that NSTAR had cut labor recently in order to maximize its own profits at the expense of the employees who were suffering from lack of benefits. The management denied all such claims and said that the union members just wanted attention and had actually declined a number of very attractive proposals that NSTAR management had put on the negotiation table. This was one of the classic cases of union power in which the largest union of NSTAR, Local 269, revolted against the management and demanded that their work contracts be remedied so as to grant their labor rights.
About NSTAR
NSTAR is ‘the largest Massachusetts-based, investor-owned electric and gas utility, with revenues of approximately $3.3 billion and assets totaling approximately $7.8 billion. NSTAR transmits and delivers electricity and gas to 1.1 million electric customers in 81 communities and nearly 300,000 gas customers in 51 communities. NSTAR employs more than 3,100 employees in its regulated business.’ (NSTAR, 2007).
The nature of NSTAR’s business implies that they are greatly dependent on their skilled and semi-skilled labor. This work cannot be outsourced and is less flexible than most jobs available today and therefore, labor has a lot of bargaining power. Furthermore, the ‘Careers’ section on the NSTAR website claims that they offer a ‘challenging working environment’. However, the great labor crisis of 2005 indicates that the working conditions might have been too challenging for some workers. However, this was NSTAR’s first strike in twenty years (Lewis, Diane, E., May 2005).
Employee’s Side of the Story
Gary Sullivan, the president of the Utility Workers Union of America Local 369, was in the spotlight most of the eleven days that it took to convince the union members to come back to the negotiation table. He stated, while talking to Somerville News, that they did not ‘go on strike’, they were ‘put on strike’ (Sullivan, Jody, L., June 2005). He insisted that the company was doing well and ought to share the fruits with the employees. He also stated that the company was withdrawing benefits instead of giving them out.
NSTAR declared in the year 2005 that it had its ‘best year’ in terms of profits. Union leaders declared that it was this that triggered them off. They had been compromising on benefits and pay because they believed that the company was in trouble. Sullivan gave several examples of how the employees had been cheated out of their monetary rewards and benefits: ‘NStar bases contributions to the 401(k) plan on workers’ total earnings, including overtime.’
This meant that the deductions for payments to the retirement plan were greater than what would be if they were calculated without the overtime pay. Another example he gave was that ‘the company uses vacation averaging to determine how much time off workers should get. That, too, he said, includes overtime. (Lewis, Diane, E., May 2005).
The employees claimed that they were greatly overworked. When their work contracts expired on May 15, they decided to go on strike. ‘We’ve lost about 100 jobs in this area alone,’ said Arthur Rebello, Vice President of the Utility Workers Union, while talking to Standard Times. ‘Our guys have to work 500, 600 or 700 overtime hours because we don’t have the personnel. When I first got here 25 years ago, we had departments that had 25 to 30 people.
Now those departments are down to eight or nine people.’ (Goren, Daniel E., May 2005). He explains how the situation has gradually deteriorated over time and how the electric and gas workers have sunk into the depths of a overworked, miserable work lives.
Rebello also claimed that workers who were overworked to the core were in great danger, especially as they dealt with the dangerous equipment that was involved in their line of work. Tired and exhausted workers tend to make mistakes. He also elaborated that another basis of their strike was that the workers were at the age at which they should be retired. This also meant that workers made more mistakes than normal.
He says, ‘failure to replace retired employees has left workers unable to keep up with basic preventive maintenance’ (Goren, Daniel E., May 2005). Sullivan declared that there used to be emergency workers and preventative workers, but because of excessive staff reductions there were only emergency workers and no preventative maintenance was being done (Sullivan, Jody, L., June 2005).
It was also claimed that the company had withdrawn their health care insurance coverage. Gary Sullivan claimed that it was Blue Cross Blue Shield (the insurance providers) who informed them of the withdrawal and that the company had not even bothered to tell the employees (Sullivan, Jody, L., June 2005). Union members also claimed the NSTAR had withdrawn a number of health benefits from the older workers.
Particularly, Rebello claimed that NSTAR was withdrawing the dental and vision benefits for the older workers. He elaborated on the gravity of the situation by saying: ‘Let’s face it, when do you need vision and dental? When you’re older. What they are saying is that older people don’t need their eyes or their teeth.’ It appears to be quite a tactless move on NSTAR’s part if they withdrew retiree benefits but the management’s side of the story indicated that no such thing happened.
The Management’s Side
The management, of course, denied all such claims, though they refused to discuss the union statements openly. They said that the workers were digging up false claims of outdated equipment and of unsafe working conditions. Michael Durand, NSTAR spokesperson, explained to Standard Times that they valued their employees ad they offered them very attractive packages. He said they offered ‘pay and staff increases and continued world-class benefits’. He explained that they had made a generous offer to the union and if the employees had seen the offer themselves, they would have come to the same conclusion. However, such remarks were considered with distaste by the workers and were regarded with suspicion.
Mr. Durand explained that the package they had offered the union had been discarded because of union leaders’ personal interests. He said the package they offered was quite attractive: ‘The contract would have added 132 new union positions as well as pay raises for union members, Mr. Durand said.
The average union member makes $97,000 a year, according to NSTAR. But the new contract would have also done away with restrictive clauses that hindered NSTAR’s ability to respond to outages, Mr. Durand said.’ (Goren, Daniel E., May 2005). At the same time, Mr. Sullivan insisted that the issue was not money but about the overwork that faced the labor of NSTAR (Lewis, Diane, E., May 2005).
Mr. Durand explained that a major point of conflict had been the setting of afternoon shifts. Traditonally, the union had had rules about not scheduling afternoon shifts. The company explained that the afternoon was when most of the electrical breakages occurred. The union members took advantage of this situation to get extra pay. To cope with the afternoon breakages, the company had to call in off-duty union workers and pay them overtime to fix the breakages. This not only drove up costs for the company but also resulted in delays. Since the customers were not provided immediate service, they were dissatisfied with NSTAR.
The management also denied having withdrawn dental and vision benefits from the retirees. The management declared that the health costs had gone up nationally, and therefore, they had requested that the retirement plans be altered to reflect these rising costs: ‘All we’ve asked for regarding the health benefits of workers is a modest increase in what they pay towards the cost of the plan. This is a national issue with runaway health care costs. It is not an NStar issue,’ explained Mr. Durand to Standard-Times.
Outsider Views
Analysts believed at the time that the move was rather irrational on the union’s part. In recent years, the power of unions has declined considerably. They get little recognition from the National Labor Relations Board and the law itself. Unions have been known to present absurd suggestions and cause trouble in companies and the business community is wary of them.
‘Given the economic climate and how the courts are interpreting labor law, it is a risky time to go on strike,’ Thomas Juravich, director of the Labor Relations and Research Center at the University of Massachusetts at Amherst, said while giving his views to Diane E. Lewis. ‘But what Gary Sullivan has working for him is a highly seasoned workforce that is not easily replaced. Vocational schools have not done a great job in the Commonwealth training people to move into these positions. And unlike garment work, these jobs can’t be moved abroad.’ (Lewis, Diane, E., May 2005).
Therefore, the analysts were of the view that the labor was taking advantage of the situation to an extent. The dramatic dialoguing that the union leaders used in their communication with the press also contributed to the general opinion that the union leaders were irrational.
However, there were still some supporters of the union who believed that Sullivan was actually a guy who was applying his negotiation skills in the right place. Myles Calvey, business manager at Local 2222 of the International Brotherhood of Electrical Workers in Quincy said that Sullivan ‘injected new energy into the labor movement’. He told Diane E. Lewis that in the current economic climate, it was very difficult to convince the employees to actually go on a strike. ‘There is no winner in a strike if you and management are not able to hammer out a relationship later,’ said Calvey. ‘But Gary has his workers and the Massachusetts union leadership behind him.’
Thus there were still admirers of Sullivan, who thought that he was more than a man with conservative ideas about labor unions and that he did his job well. Steve Early, spokesman for the Communication Workers of America in New England, said that ‘Gary is an example of a growing number of people in industrial unions who are taking advantage of labor education degree programs as a way to improve their skills.’ (Lewis, Diane, E., May 2005). Sullivan as a result had the admiration and sympathies of quite a few people.
Resolution of the Conflict
The union members voted against continuing the strike on June 15. The union secured a 12 percent wage increase over four years (Sullivan, Jody, L., June 2005). The new work contracts also promised to hire 150 new workers, to reduce the workload on the existing employees. Many of the new workers were supposed to perform system maintenance, which had been ‘a key union goal’ from the beginning. The union agreed to work afternoon shifts during the summer months to help improve customer-response times. The retirees also benefited as ‘the employee contribution to the medical plan increases incrementally from 15% to 20%, covered workers receive 3% wage increases each year, and the pension plan is maintained for both employees and retirees’ (Bush, Rick, July 2005).
Sullivan was quite happy with the deal. He believed that the contracts safeguarded the rights of the employees and protected the retirees as well as current employees. ‘This is an excellent contract for our members. This is a victory for public safety and worker safety. It is a great step forward for the union, for NSTAR and for the communities we serve. This contract protects the rights of workers and safeguards the health and pension benefits for employees and retirees. Working together with NStar management, we were able to make this a better, safer and stronger company. The union’s main concern is safety related, and the company cut back on the number of workers sent out on jobs,’ he declared to Somerville News (Sullivan, Jody, L., June 2005).
NSTAR management was satisfied with the deal as well. The new contracts allowed them greater staffing flexibility and it allowed fair pay and benefits. The company also managed to secure a slight increase in insurance premium payments from workers (Sullivan, Jody, L., June 2005). Most of all, as the company CEO, Chairman and President Thomas May claimed, the company was happy to have its employees back.
The Future
Though the strike may be over and the union members satisfied for the time being, NSTAR did not score many gold stars in the job market during this period. There is a lot of resentment among the employees who feel that they had to fight to the last drop of their blood in order to obtain what was their due right (a review of several employee blogs indicated that). Some employees were even planning to quit after seeing the management reluctance to improve their pay and benefits.
A better option for the management would have been to keep the employees from taking the issue public at any cost. It was important for the company to keep the union leaders happy. NSTAR could have tried to talk to the employees directly instead of through the union. It appears that the company’s organizational structure is quite rigid. The communication between the employees and management appears to be limited to memos and work orders. The management could have attempted to improve this communication by encouraging the employees (and not just union workers) to talk to the managers directly about their grievances.
The employees could have been allowed to design their own work schedules and benefit programs, within given limits. The management could have maintained good relations from the start in order to avoid such action. The union could also have acted more sensibly. Taking the issue public means that they are inviting all sort of criticism. They should have used rational arguments in order to gain attention rather than the emotional appeal applied by most union members who made dramatic statements to the press. This made the press believe that the union members were just blackmailing the company and had political benefits involved.
The issue may appear to be settled today, but we cannot say it is over for good. As long as the company hires labor, it will have to go through contract negotiations. However, public action can be avoided by careful negotiation and bargaining. The issue does not seem to be closed for NSTAR though as the employees went back from the bargaining table thinking they had sacrificed something. It is believed that pay and benefits issues may cause dissent in the future at NSTAR again and possible union action as well.
Bibliography
“About NSTAR” and “Career Opportunities”. NSTAR. 2007. Web.
Bush, Rick. “It’s not just a strike, it’s an adventure.” Transmission and Distribution World Magazine, 2005. Penton Media Inc. Web.
Goren, Daniel E. “NSTAR union workers begin strike.” The Standard-Times, 2005. SouthCoastToday. Web.
Lewis, Diane, E. “A new breed of union chief in midst of risky strike move.” Boston Globe, 2005. Newspaper Source. Web.
Sullivan, Jody, L. “NSTAR strike resolved.” The Somerville News, 2005. Web.