Labor trouble brewing for AT&T as union rejects proposed contract

Just two months after Verizon (NYSE: VZ) settled a costly strike with workers, AT&T (NYSE: T) is experiencing some labor troubles of its own for the first time in several years.

Fortune reported today that a group of 40,000 union members of the nation's second-largest mobile network operator rejected a proposed benefits contract that was completed in June between AT&T and representatives of the Communications Workers of America. The four-year contract primarily covers health care benefits for AT&T Mobility workers while other agreements address issues such as wages and pensions.

Fortune reported that "neither side had much to say initially" today after the contract was voted down late last week, although an AT&T spokesman described the vote as "unfortunate."

The current pact reportedly expires at the end of the year and includes a no-strike provision, giving the union and the carrier some time to hammer things out. AT&T released a statement saying both parties have agreed to continue to meet "in a continuing effort to reach an agreement."

The CCA and the International Brotherhood of Electrical Workers in May agreed to a four-year labor contract with Verizon, putting an end to a month-long strike of the carrier's nearly 40,000 wireline workers. Analysts at the time speculated that the stoppage may have caused the carrier to rein in its network investments.

U.S. Secretary of Labor Thomas Perez was eventually brought in to help facilitate a final agreement between Verizon and the two unions in May.

For more:
- see this Fortune report

Related articles:
Verizon, CWA, IBEW reach tentative deal to end strike of wireline workers
AT&T, IBEW agree on 1-year contract extension, CWA negotiations ongoing
Evercore: Strike at Verizon may slow spending on wireless network

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