Court Rules Against FairPoint Subcontracting

December 2, 2013

When FairPoint Communications bought Verizon’s New England landline holdings in 2008, the company announced that fears among IBEW members who had worked for Verizon that the new company would outsource and cut jobs were unwarranted.

They promised to create hundreds of jobs in our region,” says Peter McLaughlin, business manager of Augusta, Maine,, Local 2327 and chairman of System Council T-9, which represents 1,700 workers at FairPoint in New Hampshire, Vermont and Maine.

But FairPoint’s promises were broken when, in 2009, the company hired TeleTech,a Canadian company to perform some service center work, telling the union the project would only last three months. The work dragged on indefinitely and, in 2010 was transferred to another nonunion company in Utica, N.Y.

As part of Verizon’s sale, FairPoint agreed new language that states the company cannot transfer jobs to any entity that is not a signatory to the agreement. Those protections exceeded limitations on subcontracting in the Verizon contract.

Local 2327 filed a grievance contending that the work of 39 outside contractors belonged in the bargaining unit. The local won its case in arbitration. 

Arguing that the arbitration panel had ruled outside the scope of their authority, FairPoint appealed the arbitration decision to U.S. District Court in Maine. In 2012, the District Court upheld the union and directed FairPoint to remedy its violation of the contract.

FairPoint still wasn’t satisfied and appealed the district court’s ruling to the U.S. Court of Appeals for the 1st Circuit in Boston.  In November, the appeals court again upheld the union’s grievance.
Local 2327 has given FairPoint, which emerged from bankruptcy protection in 2010, two weeks to settle the subcontracting grievance. The work is to be returned to Portland, says Business Agent Jenn Nappi. 

The current IBEW-FairPoint collective bargaining agreement expires next August.  The company’s third quarter earnings, says Nappi, shows that the company’s profits have stabilized.

“Whether the company can stay on a sustainable path,” she says, “depends upon making the right management decisions, not wasting time and money on fighting the union, like they did on the subcontracting issue.”