CWA and Sprint Nextel Reach Agreement on Labor Issues

Union withdraws from regulatory review of new local service company

Overland Park, Kansas -- Sprint Nextel Corp. (NYSE: S) and the Communications Workers of America (CWA) today announced an agreement covering labor relations issues for employees of Sprint Nextel's local communications company.  The separation of the local communications company, which will be known as Embarq Corporation, from Sprint Nextel is expected to occur in the second quarter of this year. 

CWA Telecommunications Vice President Jimmy Gurganus said in recent talks with Sprint Nextel that, "We received assurances over questions we had regarding the financial characteristics of the new company and the transfer of pension assets." As a result, he said, CWA has withdrawn its interventions in state regulatory proceedings. 

"We wanted to make sure that the new company would have the resources to invest in the future, have the ability to compete successfully and provide quality service and secure jobs," Gurganus said.  "As a result of our talks, we are now satisfied on that score."

"We are pleased that we were able to address the CWA's questions regarding the structure of the separation from Sprint Nextel," said Mike Fuller, Chief Operating Officer designee of Embarq.  "We look forward to continuing to partner with the CWA to offer our customers the great products and services they have come to expect," he said. 

CWA represents approximately 3,800 workers in the local telecommunications operations at Sprint Nextel in 12 states.

Among the terms of the agreement: 

• Joint strategic committees will be set up at both national and regional levels to share information, address mutual concerns and problems, and foster a better working relationship.
• The new company and union agreed to renew efforts to arrive at a national understanding on health care plan design.Before dividing and allocating pension assets to the new company, Sprint Nextel will share its actuary's report with CWA and give the union an opportunity to comment.
• CWA employees now will participate in the company's Short Term Incentive program, which provides bonuses based on meeting specific business goals.
• The company agreed that it will seek cost-effective ways to increase rather than decrease the ratio of employees to contractors and to provide employees continued access to training opportunities.