U S West also dropped proposals that would have restricted workers' choice of doctors, eliminated overtime pay after eight hours' work and tied pay to performance for all new employees, the Communications Workers of America said. Those disagreements helped trigger the walkout on Aug 16.
Investors appeared to shrug off the deal. Shares edged up 3/8 to 52 1/2 in recent trading. See related story on U S West
The agreement is similar to those signed by the CWA with other telecommunications providers, including Bell Atlantic , analysts say. The CWA walked out for two days on Bell Atlantic earlier this month before inking a deal.
"The increases U S West gave them were quite substantial, but in line with what other Baby Bells gave," said Eric Melloul of Argus Research. "I think this is a pretty good compromise."
Under the accord, workers will garner wage increases of 11.3 percent compounded over the three-year contract, along with a $500 ratification bonus, the union said. Funding for pensions will climb 22.4 percent at a compound rate.
Initially, the company offered wages increases of 17.5 percent and pension increases of 20 percent over five years.
The union also said mandatory overtime will be restricted to 16 hours a week starting in January, a level that will fall to eight hours by January 2001. And workers will be guaranteed at least two 5-day workweeks a month.
The 35,000 union members of U S West began returning to work Monday. The accord awaits full ratification, probably not until after Labor Day.
"(T)his agreement maintains our members' health security, enabling them to choose the health plan and doctors that suit their families' needs," said District 7 Vice President Sue Pisha, CWA's chief negotiator at U S West. "And it provides solid wage and pension increases to help retain a high quality, well trained workforce."
While U S West did not appear to win any significant concessions from the union, analysts say the company made it clear that changes are on the way and that workers will have to realize it means business.
For example, U S West wanted to force all new employees to adhere to a pay system that would have tied wages to performance. While the company did not win such a concession outright, the union did agree to allow the creation of such a pay system.
Yet the union will have input into its design and implementation, and workers will have the option of whether to join. Still, the company hopes to use the plan to improve productivity, offering greater rewards to employees who excel.
The strike was the first against U S West since its creation in 1984 after the breakup of the old AT&T.
The company has about 25 million customers in states from Washington to Minnesota.
By Jeffrey Bartash, CBS MarketWatch