CWA drops lawsuit against AT&T’s breakup plan

(Telephony) The Communications Workers of America (CWA) has dropped a lawsuit against AT&T that it had filed just three weeks ago--jointly with the AFL-CIO and Amalgamated Bank--to stop AT&T from amending its charter to require a simple majority vote of shareholders to approve proposals such as the company’s reorganization plan.

Currently, a two-thirds majority is required. The vote to amend the charter is scheduled for the AT&T annual shareholder’s meeting May 23 in Cincinnati. When it filed the suit, the CWA accused AT&T of making “an end run around shareholders,” and of “adopting an illegal process for amending its charter.”

Essentially, the CWA was concerned--and still may be--that AT&T would have an easier time getting shareholder approval for the proposed restructuring that would split the behemoth into separate and distinct units covering its consumer, business, broadband, and wireless markets. The union said at the time of the suit that it was against the breakup because it would move AT&T further from a bundled telecommunications services strategy.

According to a CWA spokeswoman, the union is still monitoring the situation carefully but felt that “it is responsible to pull back when you don’t want to jeopardize some possible developments that could be good.”

Specifically, AT&T addressed some nagging issues concerning the role of CWA-member employees, according to a company spokesman.

“One of the major concerns seemed to be making sure the union members [are] aware of the opportunities that exist throughout AT&T,” he explained. “We also have been talking to them about basically developing a process to make sure that happens. For example, if members need any particular training to be eligible for a job opening … we need to try to develop a process for getting that training for them.”

But it goes beyond that, said the CWA spokeswoman.

“There have been reports about other possible alliances or acquisitions, … and we didn’t want our lawsuit to stand in the way of what could be a positive development for shareholders,” she said. “As long as we continue to talk, we thought we could withdraw the suit and gauge our progress as we go along.”

The CWA spokeswoman also said AT&T chairman and CEO C. Michael Armstrong influenced the union’s decision to withdraw the suit.

“Because Armstrong actually played a key role in this and actually has acknowledged that these are important discussions and these issues need to be resolved, I think we have the sense now that we really do have the potential to make some improvements,” she said.

The spokeswoman denied, however, that the lawsuit was nothing more than a bargaining chip designed to get AT&T to address some long-standing issues to the union’s satisfaction.

“I don’t see this as a 180 at all,” she said. “We don’t know what we’ll be doing at the shareholder’s meeting in terms of what position we’ll be taking. We’re continuing to meet with AT&T and we’ll see where we are. We’ll gauge our progress and what needs to be done at that point.”