AT&T Inc., the largest U.S. phone company, failed to reachagreement to renew four contracts with one of its unions and saidit will extend negotiations to reach a deal.

AT&T, based in Dallas, and the Communications Workers ofAmerica didn't agree before the expiration of the East, Legacy T,Midwest and West contracts, the carrier said in a statement.

The Communications Workers of America is renegotiating fourseparate contracts with AT&T, affecting a total of 40,000workers. On March 31, union members voted to authorize CWA to callstrikes if agreements on new contracts weren't be reached. Theparties “have agreed to continue to negotiate,” AT&T said inthe statement earlier today.

“We're committed to continuing to work together with the unionto reach an agreement that will allow us to continue to provide andprotect” jobs, Marty Richter, a spokesman for AT&T, said in ane-mail after 5 p.m.

The union is focusing on local and economic issues such ashealth care, pensions and pay, Candice Johnson, a spokeswoman forthe CWA, said in telephone interviews.

“We're just going to keep pushing forward and that's whathappened today,” she said in a late-afternoon interview.

The union, which represents about 16 percent of AT&T's256,000 workers, has been organizing rallies and meetings to helppush for a deal to address issues ranging from guaranteed weekenddays off to health-care benefits. In 2004, it led a four-daystoppage at SBC Communications Inc., which bought AT&T thefollowing year.

“Unions are trying to maintain many things they've gained overthe years, and it's hard,” Ivan Smith, a partner at Lewis BrisboisBisgaard & Smith LLP, said in an interview. “In general, thestrike is the last thing a union wants. If the employer canwithstand a strike, you lose all the leverage you had. You don'tmake that move unless there's no other recourse.”

AT&T and Verizon Communications Inc. are negotiating newunion contracts amid declining margins and rising networkinvestment costs. In 2011, AT&T's total operating revenues rose1.9 percent to $126.7 billion while capital expenditure climbed 3.1percent to $20.1 billion.

Current Contracts

Last August, CWA called an end to a two-week strike by 35,000members at Verizon and Verizon Wireless, when the companies agreedto extend the workers' current contracts and resume bargaining.Verizon and Verizon Wireless, the unit it co-owns with VodafoneGroup Plc, and the union are yet to reach a new agreement.

AT&T and Verizon regularly negotiate with unionsrepresenting larger parts of their workforce. About 55 percent ofAT&T's employees are represented by CWA, the InternationalBrotherhood of Electrical Workers or other unions, according to thecompany's annual report.

Contracts covering about 120,000 employees will expire during2012, according to AT&T.

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