All too often, just the rumor of a merger sends a chill through a workplace. That certainly was the case in late 2008 when telecommunications companies CenturyTel and Embarq, employing 7,000 members of the IBEW and CWA, announced plans to combine in a $5.8 billion stock-financed deal.

A March agreement between the unions and the companies goes a long way not just in calming nerves, but in providing the framework for a partnership that holds promise for improving the new employer’s competitiveness while preserving and extending contractual protections of the bargaining units. Current language protecting jobs from outsourcing and limiting work force reductions is incorporated in the understanding.

“Launching a new company with up-front communication and dialogue between unions and management will prove its worth in both the workplace and the marketplace,” says International President Edwin D. Hill.

The new company will employ union members in 33 states and combine Embarq’s (formerly Sprint’s) predominantly landline holdings with CenturyTel’s 17,000-mile core fiber network and technological innovations, enhancing opportunities to extend high speed broadband into rural areas.

“The merger will succeed to the extent that it improves existing service quality on current landlines [and by providing] improved broadband services to a wider customer base,” states the memorandum. The signatories agree to jointly support public policy initiatives to make high speed Internet access universal and affordable, seeking public funds for broadband expansion “to the extent such funds are not burdened by unacceptable conditions.”

The parties agree to address the impact of technological changes on the work force, encouraging employees to engage in retraining that will be provided where necessary. National and regional cooperative resource councils (labor-management committees) will meet to discuss issues of common concern.

The two unions represent about 32 percent of the companies’ total work force. Recognizing that job reductions could occur, the parties agree that no more than 1 percent of the organized work force can be reduced during the first 18 months after the closing of the merger. Any layoffs will be proportional to the size of each bargaining unit.

The new company will abide by commitments in existing contracts protecting bargaining unit work from being assigned to subcontractors. The companies agree to invite unionized construction contractors to participate in the ordinary contractor certification process and, if qualified, to bid on projects.

IBEW Telecommunications Department Director Martha Pultar, who participated in the negotiations that produced the memorandum, says that the companies satisfied most of the unions’ concerns that—along with community-based issues—had led them to question the merger at public utility commissions in several states. CenturyTel, says Pultar, never had strong labor-management committees as existed at Embarq. “We hope to have more positive labor relations at the new company,” she says.

The companies will also establish a national health care advisory committee to seek savings in health care insurance costs, while working together to support public policy to improve health care delivery nationwide.

Pending state and regulatory approvals, the merger is expected to go though this summer.