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AT&T Inks Contract with Communication Workers of America

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AT&T Inc. (T - Free Report) has reached an agreement with Communication Workers of America (CWA) covering the former’s DIRECTV employees in its Midwest, Southeast and Southwest regions. The agreement will deal with multiple issues like health care, pension and wages and collectively cover about 2050 employees of the company. Notably, AT&T had taken over DIRECTV in 2015.

In Aug 2016, the CWA authorized the union to call a strike in case a new contract was not reached. The union had accused AT&T for adopting a hard-line stance related to key bargaining issues.

Back in July, AT&T had signed an agreement with the International Brotherhood of Electrical Workers (IBEW), which represents the incumbent AT&T employees across 14 states. The contract relates to similar issues as listed above and covers around 1600 DIRECTV workers.   


AT&T has been pursuing negotiations regarding new contracts covering over 16,000 wireline employees in three of its operating states. However, the company is confident about striking a fair deal with the association soon. Also, in June this year, around 40,000 AT&T wireless workers, represented by the CWA, rejected a contract proposed by AT&T related to several benefits.

The Bottom Line

In a competitive market, labor issues often stall operations, denting the reputation of telecom operators severely. Recently, Verizon Communications Inc. (VZ - Free Report) had to bear the brunt of a labor strike, which affected its operations to a great extent. Moreover, telecom players such as T-Mobile US Inc. (TMUS - Free Report) and Sprint Corporation (S - Free Report) are facing or have faced worker issues in the past. However, AT&T has been able to resolve the unfair labor practice issue recently.

AT&T currently carries a Zacks Rank #4 (Sell).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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