updated 1/31/2007 5:45:30 PM ET 2007-01-31T22:45:30

Greyhound Lines Inc. said it has extended for two weeks a labor contract with drivers and other employees that was due to expire Wednesday, avoiding for now any interruption in bus service.

Talks are set to resume Feb. 11 — three days before the extension ends — according to Local 1700 of the Amalgamated Transit Union.

The contract covers 3,300 workers, including 3,000 drivers and about half the bus company’s mechanics. The other mechanics are represented by the International Association of Machinists, and their contract expires Sept. 30, a company spokeswoman said.

A federal mediator attended bargaining sessions in January, according to the union.

Separately, Local 1700 has settled a lawsuit by the Labor Department that tried to overturn the 2004 election of five top officers, including the president.

The Labor Department charged that secret voting was compromised when numbers used to identify union members appeared on some ballots. Officials of the local called it a clerical error involving about 100 replacement ballots out of 5,000 total and would not have changed any contests.

The local agreed to let the federal agency supervise its next election, scheduled for later this year. A federal district judge in Utah signed the settlement Jan. 23.

The two-week extension of the labor contract allowed Dallas-based Greyhound to avoid an interruption in operations, President and Chief Executive Steve Gorman said in a statement. He said the company was committed to reaching a fair agreement with employees. A spokeswoman said the company wouldn’t comment further.

Bruce Hamilton, president of Local 1700, said drivers want to be paid for duties such as taking tickets and inspecting buses instead of just for driving time. He said those extra tasks can add up to two hours a day.

The union is also seeking improved health care contributions and job-security provisions, according to Hamilton, who said workers haven’t fully recovered from concessions in the 1980s and ’90s.

“Our members have sacrificed a lot over the years to keep the company in business,” he said in an interview. “We need to be taken care of.”

Hamilton said the local wasn’t planning to strike. A three-year strike in the early 1990s was marred by sniper attacks on buses. Greyhound filed for bankruptcy protection shortly after the strike began and emerged a smaller company with about half as many drivers.

Greyhound is still the largest intercity bus service in North America. It is a unit of Laidlaw International Inc., which also operates school bus lines that enjoy better profit margins than Greyhound.

In early January, Laidlaw reported a 31 percent drop in profit, to $40 million for the Dec. 31 quarter. Laidlaw said ticket sales at Greyhound were hurt by price increases and route changes.

Shares of Naperville, Ill.-based Laidlaw fell 18 cents to close at $29.71 on the New York Stock Exchange.

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