Reuters Union Flatly Rejects Contract Proposal

By: Members of a union representing about a quarter of U.S.-based employees at Reuters Group PLC have overwhelmingly rejected a contract proposal from the company, signaling worsening labor relations at the financial news and data provider.

The Newspaper Guild of New York said Tuesday its members had rejected the company's proposed contract by a vote of 278 to 4. The guild, Local 31003 of the Communications Workers of America, represents almost 450 print, television and still picture journalists, technicians and other employees at Reuters.

The guild's president, Barry Lipton, said the union was scheduling more talks with Reuters' managers. He declined to comment on whether the union was planning any kind of job actions such as a strike, but he said the union would "continue to pressure the company."

"I hope they pay attention to the fact that virtually all of the employees found their offer unacceptable," Lipton said.

Steve Naru, a spokesman for the London-based company, declined to characterize the tone of the negotiations or to comment on the contract vote, but said he expected both sides to meet again next week.

"We've worked very hard to find common ground," Naru said. "I think our proposals certainly reflect the difficult economic environment that's existed over the past couple of years, and I think our proposals are fair and reasonable."

Lipton said differences remain between the guild and Reuters over issues including medical insurance for retirees, job security provisions for technical employees and the length of the work week for television employees.

The most recent contract with the guild expired in February 2003, but its provisions remain in effect while the negotiations continue.

Reuters had been a majority owner of Instinet Group Inc., a major electronic securities trading exchange and brokerage, but in April agreed to sell its stake to the Nasdaq Stock Market and a group of investors.

The company's U.S. shares traded above $100 in late 2000 but fell to below $10 in early 2003. They have recovered since then, trading between roughly $40 and $50 this year. The shares rose 13 cents to close at $39.87 on Nasdaq Tuesday.