The health benefits offer was improved after workers rejected initial deal.

By Aaron Pressman
August 31, 2016

About 40,000 workers in AT&T’s wireless business approved a revised, four-year benefits contract, averting a further escalation of labor difficulties between the carrier and its largest union.

The workers had voted down an earlier version of the contract, which mainly covers health benefits, last month. But AT&T and the Communications Workers of America went back to the table and hashed out a revised agreement on Aug. 3.

The approval marks the latest in a string of labor deals reached at AT&T. In April, 9,400 wireless employees in the southwest region approved a new contract while 24,000 workers in the old telephone side of the business agreed to a new contract in December. Unionized workers at AT&T have reached 15 deals in 2015 and 2016 including the latest benefits contract approval, the company said.

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But this was the first major negotiation to take place after CWA-covered workers at Verizon Communications vz got a better deal by going out on strike. The AT&T workers’ rejection of the initial benefits deal had raised the specter of growing labor difficulties in the telecommunication industry following the Verizon strike.

The last major strike at AT&T t occurred in 2012 when 21,000 workers in California, Connecticut, and Nevada walked out for two days, according to the Department of Labor.

The revised deal approved in voting over the past two weeks was sweetened from the rejected proposal by including some new health plan options and reducing some premiums, the CWA has said. The contract also covers other benefits such as life insurance and tuition assistance. Pay and work rules are covered under separate contracts.

“Our objective on this one, as in all our negotiations, was to reach a fair agreement that will allow us to continue to provide our employees with excellent union-represented careers,” an AT&T spokesman said. “We feel this contract does that.”

Union officials said AT&T had earned better labor relations than other carriers by working more cooperatively and with less hostility. Verizon and T-Mobile tmus , for example, have fought allowing unions to represent workers in their wireless businesses. “Compared to the other wireless carriers, they engage with us,” Pat Telesco, an area director for the CWA who worked on the benefits contract, said. “AT&T is not perfect, but clearly we have an easier time working with them.”

The new contract includes increasing healthcare premiums over the next four years, but eliminates a higher tier that had applied to workers hired since 2014. It also includes new options with lower premiums but higher deductibles and a new HMO option for workers in Puerto Rico.

Another key change from the initial proposal involved a surcharge that hits workers if they opt to get health coverage from AT&T while turning down coverage offered by a spouse’s employer. Known as a spousal surcharge, the additional fee added $100 a month immediately in the first contract offer. In the revised offer, AT&T agreed to put off the surcharge until the third year of the contract.

The two sides will now prepare for the next big contract expiration which, unlike the benefits contract, covers only a portion of AT&T’s unionized wireless workers. In February, the main contract covering wages for mobile employees in several areas including California expires.

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