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Spectrum may face NYC franchise revocation if found to have breached contractual obligations

New York City readers may be aware of the current challenges Spectrum—formerly known as Charter Communications—is facing here locally. For those who haven’t heard, Spectrum is currently working through a worker strike, and even facing potential threats to its franchise in New York City.

With respect to the strike, Spectrum has been unable to reach an agreement with the International Brotherhood of Electrical Workers Local 3, the union representing its employees, over various issues. These include Spectrum’s decision to reduce its contributions to employee pensions and health insurance. In addition, the union has accused Spectrum of violating its franchise agreement. Last week, Mayor de Blasio suggested this could lead to the company having its franchise agreement revoked.

Spectrum’s workers’ union has filed a complaint with the New York City Department of Information Technology and Telecommunications accusing Spectrum of failing to honor a contractual requirement that it utilize vendors, to the extent feasible, in the five boroughs to provide services to customers. If the agency finds Spectrum to be in violation of its contractual obligation and its franchise agreement is revoked, Spectrum would be unable to provide services in New York City.

Spectrum’s official position is that it is in full compliance with the franchise requirements, which it claims allows it to bring in contractors located in other areas. The company claims that most of its contractors during the strike are from New York City. Evidently, the workers’ union takes issue with this position.

Contractual agreements govern nearly every aspect of business, and companies need to have a firm handle on the way they approach contract negotiation, the standard terms they include in their contracts, and how to resolve disputes when disagreements over contractual obligations arise. Working with experienced legal counsel is critical to help ensure businesses have guidance and advocacy on these matters, and help ensure both that businesses’ use of contracts is serving their interests and that their contractual rights are properly enforced and defended when threatened. 

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