Unionized employees of Hawaiian Telcom launched a planned two-day walkout Thursday, picketing at key sites including the company’s Bishop Street headquarters.

About 120 picketers walked in the rain, waving signs at passing downtown traffic and chanted demands for a new contract.

The demonstrators protested that they have accepted concessions on wages and pensions while the company struggled financially, only to see Hawaiian Telcom President and Chief Executive Officer Eric K. Yeaman accept a 400 percent increase in compensation to $6.72 million last year.

Harold Dias, international representative for the International Brotherhood of Electrical Workers, announced to picketers over a bullhorn that "we are the ones who have committed to provide excellent customer service through it all, but they are the only ones who are rewarded."

Scott Simon, Hawaiian Telcom’s executive director for corporate communications, said the company executed contingency plans by deploying company managers, local and mainland contractors, and contract hires to cover duties normally handled by unionized employees.

"We are not expecting disruptions to our service," Simon said.

However, some lower-priority tasks will be put aside to support the telecommunications needs of police, fire and health care workers as well as the needs of the Asia-Pacific Economic Cooperation summit under way in Honolulu, he said.

Other field work and repairs will be prioritized based on available resources, and the company warned customers to expect some delays. Wait times when calling Hawaiian Telcom might also be longer, and the company released a written statement apologizing in advance for any inconvenience caused by the walkout.

"It is unfortunate that at a critical time for Hawaii, when so many are volunteering and sacrificing to show that Hawaii is an ideal place for high-level business gatherings and international diplomacy, that the union leadership would choose this time to go on a work stoppage," Simon said. He said the company twice offered contract extensions beyond the APEC summit but that IBEW leaders refused both offers.

Lisa Parran, who handles communications for the negotiating committee for IBEW Local 1357, said the walkout should dramatize for company management that union members were serious when they voted to authorize a strike late last month.

The planned two-day stoppage that began at 10:30 a.m. Thursday is designed to minimize the inconvenience to consumers as well as the financial impact on union members, union leaders said.

Dias said the union is instructing members to return to their scheduled shifts starting tonight, but Simon would not rule out the possibility that Hawaiian Telcom might not allow the workers to return to their jobs tonight.

"At this point the company is exploring all options in terms of what is good for our customers and the community," Simon said. "All options are being explored."

Parran said the union tried to resolve the contract dispute long ago and that "it is a stretch" to say the walkout was deliberately timed for the APEC summit. However, she noted Hawaiian Telcom CEO Yeaman serves on the APEC 2011 Hawaii Host Committee, and the walkout "raised questions that they didn’t want to answer."

IBEW representative Dias said Hawaiian Telcom employees who are IBEW members were asked to staff pickets at the company’s Bishop Street and Moanalua facilities on Oahu, as well as at Hawaiian Telcom facilities on Maui, Kauai and in Hilo, Kona and Waimea on Hawaii island.

Hawaiian Telcom is the state’s largest telephone company with about 1,300 employees, and about 700 are represented by the IBEW. The unionized workers include field technicians, line workers and call center representatives.

The union contract expired Aug. 12, and the two sides agreed to a series of one-week extensions during negotiations. The company made a "last best and final" contract offer in early October, but IBEW members voted 513-85 late last month to reject the company’s proposal and authorize a strike.

The company described its final offer as a good-faith attempt at an agreement "that fairly balances all parties’ needs with the benefits provided by competitors and other employers, and the realities of competition in the communications business and a challenging economy."

Union leaders urged members to vote against the contract because it included reductions in overtime and sick leave, a freeze on the traditional pension plan and increases in medical costs.

The company offer proposed that IBEW members pick up 10 percent of their health insurance premium costs — union members pay nothing now — and proposed a reduction in the maximum paid sick leave allowed to eight weeks per year, according to Simon.

Union employees have had a pension plan as well as a 401(k) plan, and the company proposal would also have frozen the pension plan at existing values while increasing the allowable company match for the 401(k) plan, according to a statement by the company.

As for the union members’ complaint that Yeaman saw his compensation increase to $6.7 million in 2010 from $1.3 million in 2009, Simon said the CEO and top management compensation packages are set by the company board of directors.

The board aims to set compensation at the 50th percentile of industry peers, and to set compensation levels to be comparable with other local publicly traded companies, Simon said.

Simon said top managers have also been required to pay 15 percent of their health care benefits costs, and that management’s pension program was frozen more than four years ago.

Customers with billing, service or other questions can find assistance at hawaiiantel.com.

Hawaii News Now video: Hawaiian Telcom workers hit the picket line