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IBEW Helps Win $10 Million Settlement
at American Water


November 18, 2014

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Members of the Utility Workers Union of America, the IBEW and 17 other unions have taken their case to surrounding communities decrying steep reduction in worker benefits even while the company asks for rate increases.

On Oct. 30, with the signing of a settlement, American Water has agreed to pay nearly $10 million in lost benefits to members of 19 unions representing workers at the company. The settlement was ratified by union members by a margin of 2 to 1.


In January 2011, American Water, a key player in the privatization of municipal water treatment across the U.S., implemented an agreement upon its bargaining units after 10 months of negotiation. Its terms reduced and eliminated benefits resulting in a significant shift in medical costs to nearly 3,500 members. The international unions involved in the negotiations filed a charge with the National Labor Relations Board. The charge was upheld by the NLRB but has been appealed to the federal courts and is still pending.

 The climate for reaching an agreement changed after a change in corporate leadership opened the door for discussion to reach a settlement.

“We are hopeful that this settlement agreement marks not just the end of a long struggle, but the beginning of a new relationship between American Water and unions representing thousands of employees,” says International President Edwin D. Hill. “The public that depends upon the services provided by American Water needs to know that the parties are working together to provide the highest quality, lowest cost product to customers.”

Eleventh District International Representative Jim Lynch, who has participated in national negotiations with American Water since 2010, says he is optimistic that the settlement agreement marks a turning point at a company that he once described as the “greediest” company he has faced in 25 years of negotiations.

IBEW members of five locals are employed by American Water. They calibrate and change water meters, repair breaks, install new lines and maintain water treatment systems.

Unilateral changes imposed in 2011 by American Water boosted medical benefits by $11 per month for individuals and $75 per month for families. The changes affected members in 14 states, working under 65 collective bargaining agreements.

In 2012, the unions’ concerns were vindicated when an administrative law judge held that American Water had violated the NLRA by failing to notify state mediation agencies about an ongoing dispute with the unions over benefit coverage.

Unions, including the Utility Workers Union of America, representing the largest number of members at American Water, expected payouts of back pay liability estimated to be several million dollars and the possibility of developing an improved relationship with the company.

But then American Water appealed the NLRB’s decision to the United States Court of Appeals for the Seventh Circuit. All back pay was put on hold pending a decision from the court.

That’s where things stood when the company’s leadership team changed in May. “The Brotherhood had a decent relationship with a member of the management team,” says IBEW Utility Department Director Jim Hunter. That relationship, he says, was critical to unions reaching the settlement agreement with American Water to resolve all issues connected to the company’s unilateral modification of benefits.

Under terms of the agreement covering organizations including the IBEW, Utility Workers, Laborers, Steelworkers and Service Employees International Union, the company agrees, in addition to paying $10 million in lost benefits, to impose limits in out-of-pocket spending by employees for health care coverage during 2015. While costs could increase in 2016 and 2017, the company agrees that the employer-employee ratio s health care costs will be maintained at 75/25 split.

The parties also agree to the creation of a health care cost management committee comprised of four representatives of the unions and four representatives of the company to periodically meet to explore options regarding health insurance costs.

All local unions currently negotiating successor agreements with American Water will have the option of electing to extend contracts for one year with the only change being an across-the-board wage increase of 2.25 percent for such extension year.

The agreement concludes with a commitment to partnership, supporting future training and development, improved health and safety and growth opportunities for the company and its affiliates.

Locals representing workers at American Water include Springfield, Ill., Local 51; Indianapolis Local 1393; Joplin, Mo., Local 95; Kansas City Local 1464 and St. Louis Local 2.