AT&T Inc. (NYSE:T) has suffered a major blow on an ongoing labor negotiation after workers represented by the Communications Workers of America in California turned down its latest labor contract deal. In a narrow contentious vote, 53% of some 17,000 workers turned down the carrier’s offer.

AT&T Offer

The workers who work on the carrier’s telephone and internet business as well as the DirecTV unit continue to maintain a hard stance in the negotiations. Their aggressive stand became evident when they decided to go on strike in May as they advocated for better pay and improved working conditions.

The rejected proposed contract could have seen the workers enjoy an 11% wage hike spread over four years. AT&T also promised job security in addition to increasing healthcare insurance premiums to 29% by 2020.

“It’s unfortunate that union members failed to ratify this very fair agreement, which included terms that would make our employees in the contract better off financially,” AT&T in a statement.

 Labor Tensions

By rejecting the current deal, the workers are holding for an improved deal from the company. Last year AT&T was forced to come back with an improved contract offer for a group of more than 40,000 unionized workers, after they turned down an initial offer. The carrier has so far reached 30 fair labor agreement with various unions representing staff since 2015

However, the outcome of the vote also places AT&T in a tough spot as it continues with negotiations with a second group made up of about 21,000 workers spun over 36 states.

Labor tensions have been rife in the telecommunication space, Verizon Communications Inc. (NYSE:VZ) workers having gone for a seven-week strike last year as they pushed for a better contract. Workers at AT&T embarked on a go slow this year having gone on strike the last time in 2012.

Workers in the sector are increasingly pushing for higher healthcare costs as well as job securities. A push for job securities comes at a time when most companies have resorted to outsourcing as a way of cutting down on growing wage bills.

AT&T stock was down by 0.54% in Friday’s trading session to end the week at $36.98 a share.