New report: Over 90 percent of ‘authorized retail’ workers at leading telecom carriers report wage theft; nearly three quarters make less than $16 an hour

A new report from CWA and the National Employment Law Project (NELP) provides a first-of-its-kind look at the effects of outsourcing in the wireless telecom industry. The report titled, “Broken network: Workers expose harms of wireless telecom carriers’ outsourcing to ‘authorized retailers,’” includes a survey of over 200 workers from nearly 45 states at “authorized retailers” for the industry’s three dominant carriers, AT&T, T-Mobile, and Verizon. The workers’ responses reveal that the practice of outsourcing stores to third party authorized retailers by these carriers, referred to as workplace fissuring, has detrimental impacts on workers and consumers, including unstable and suppressed wages, wage theft, inadequate training, retaliatory work environments, fraudulent sales practices, unpredictable schedules, and poor customer service.

Wireless carriers currently outsource 60 to 80 percent of their branded retail locations to authorized retailers. AT&T alone has closed nearly 600 of its corporate-owned stores since 2018 in favor of using authorized retailers. According to the report:

• Nearly 75 percent of authorized retail workers surveyed reported that 25 percent or more of their pay was derived from commissions tied to sales.
• About 80 percent reported being worried about meeting basic financial responsibilities like rent and groceries as a result of receiving less than their expected levels of commissions or bonuses.
• More than 90 percent reported that an employer had engaged in some form of wage theft.
• 80 percent reported fluctuating hours or work days week to week, and 68 percent reported last-minute shift changes
• Over 50 percent reported that they had experienced negative treatment from their employer for raising workplace issues.
• 90 percent reported that the wireless carriers themselves still exerted control over them as employees, including when it came to promotions, hires or discipline, setting schedules, setting performance benchmarks, and training.

“CWA members have been fighting back against outsourcing for years, whether it is through collective bargaining or direct action, and encouraging the public to use union stores,” said CWA District 3 Vice President Richard Honeycutt. “Outsourcing is a tactic that cuts corners and falls directly in line with the profit-boosting strategies of vulture capitalist firms like Elliott Management. It is not sustainable, and it comes at the cost of workers and customer service. It’s time companies like AT&T and Verizon adjust their game plan and start putting their workforce and the needs of customers first.”

Unlike workers at corporate stores, workers at authorized retail stores do not have the ability to form a union and bargain directly with the company that holds power over their wages and working conditions. In the last few years, telecom companies have increasingly converted corporate-owned stores to authorized retail stores in order to boost profits, avoid accountability, and strip workers’ rights and protections. For example, AT&T’s escalated use of authorized retailers in the last five years—from 61 percent of stores in January 2018 to 73 percent in December 2022—coincided with a loss of over 10,000 union-represented jobs.

“I have worked in the wireless industry for many years and I know first hand the difference having a union contract and a voice on the job makes. Prior to coming to my current job at a union store, I worked at an AT&T authorized retailer and as a manager at a corporate owned T-Mobile’s store. Coming to work at a union-represented AT&T store was life-changing. I was pregnant with my daughter, so I needed a more stable, accommodating workplace,” said Karen Nagjee, CWA Local 3204 AT&T Mobility Vice President. “At T-Mobile, I didn’t have flexible hours, or any control over my own job. Now, I have a union contract and the ability to negotiate my working conditions with management. When I take PTO, I no longer have to worry about being called in last-minute or having to make up my sales. I can finally plan my life around my work schedule and take care of myself and my family. Right now, I feel empowered to stand alongside my fellow union members and fight for a contract that limits outsourcing so we can keep more good, union jobs in our communities”

Without the protection of a union and a collective bargaining agreement, workers at authorized retail stores face significant disadvantages when it comes to pay, benefits, and working conditions. For instance, base pay rates for surveyed workers at authorized retailers are lower than the rates of union-represented retail store employees working directly for AT&T. 

Furthermore, while all CWA-represented workers at AT&T corporate stores have access to employee benefits such as health insurance, retirement, paid vacation, and paid sick leave, the survey results show that access to these benefits is not universal for authorized retail workers. In particular, less than half of respondents reported having access to retirement benefits and paid sick leave.

Union workers in the wireless retail industry have shown that collective bargaining can be an effective tool to halt workplace fissuring in retail. In 2022, CWA-represented members at AT&T Mobility bargained a new agreement that included groundbreaking limits on AT&T’s ability to outsource corporate retail stores to authorized retailers. 

The practice of outsourcing to authorized retailers also shields the wireless carriers from accountability for the treatment of their workers while still exerting a significant level of control over the operations of the authorized retail stores. 90 percent of the authorized retail workers surveyed reported carrier involvement in some aspect of their employment or workplace policies or practices, such as hiring and promoting workers, setting performance benchmarks or metrics, setting work schedules, and training workers. These findings are critical as the National Labor Relations Board (NLRB) is currently considering a newly proposed rule to replace the existing one that shields carriers like AT&T from accountability to workers. Under the new rule, both AT&T and the authorized retailers could be considered joint employers and thus might be liable for one another’s unfair labor practices.

“Corporate abuse of outsourcing to shed accountability for the quality of jobs under their control is pervasive across industries in the US and workers are losing wages, benefits, and access to basic labor protections as a result,” said Maya Pinto, Senior Researcher and Policy Analyst at NELP. “This abuse can be halted if guardrails are put in place, as CWA has recently been able to do through collective bargaining in the wireless telecom industry.”

The report also includes other policy recommendations to curtail the negative impacts of increased outsourcing to third party retailers. Passing several key pieces of legislation such the Protect the Right to Organize (PRO) Act and the Schedules That Work Act as well as banning the use of non-compete agreements are among the recommendations included in the report.

Links:

New report: Over 90 percent of ‘authorized retail’ workers at leading telecom carriers report wage theft; nearly three quarters make less than $16 an hour (CWA, Feb. 7, 2023)