A threatened strike at 56 Costco stores across six states has been averted for now, as the company and negotiators for the Teamsters union, representing 18,000 workers, reached an 11th hour tentative agreement, the union told CNN early Saturday morning.
Full terms of the deal were not immediately available. Costco did not respond a request for comment. The strike would have been the largest ever at an American retail chain, and the first ever at the big box retailer.
Beyond wages and benefits, the union also had demands regarding seniority pay, paid family leave, bereavement policies, sick time, and safeguards against surveillance.
The agreement, announced several hours after the contract expired at 11:59pm PT Friday, does not completely end the threat of a strike. It would still need to be ratified by rank-and-file members of the union at Costco before it goes into effect. Last fall, unionized workers at Boeing voted down a tentative deal its union leadership had reached with the aircraft maker and started a strike that lasted two months. But most tentative deals do result in a final contract.
Teamsters members at Costco make up 8% of its 219,000 employees at 616 US stores, according to company filings. But a strike by that many workers would behave been significant for the largely non-union sector of the economy. Labor Department statistics show that less than 5% of retail workers are represented by unions. Most of those unionized retail workers work in grocery stores.
The specific locations of the unionized stores have not been identified by either the union or company. But the union said they are in six states along the East and West Coasts – Maryland, New Jersey, New York and Virginia as well as California and Washington state, the latter being Costco’s corporate home. Costco had said on Friday that even if its unionized workers had gone on strike, “all of our locations will be open for business this weekend,” an indication that it intended to use management and non-union staff to keep stores operating.
And even though the Teamsters only represent workers at a small fraction of Costco stores overall, it was prepared to set up picket lines at an undisclosed number of non-union Costco stores nationwide, even if workers at those stores remained on the job. Such a move could have greatly increased the economic pressure on the company. While there are only 18,000 Teamsters at Costco, the union has more than 1 million US members it can call on for other picket lines.
Costco has a reputation for providing relatively good pay and benefits, especially compared to other retail chains. Its annual company filing states that “our philosophy is not to seek to minimize their wages and benefits. Rather, we believe that achieving our longer-term objectives of reducing employee turnover, increasing productivity and enhancing employee satisfaction requires maintaining compensation levels that are better than the industry average.”
Costco confirmed a Reuters report that it recently sent a letter out to all employees at non-union stores announcing it was raising pay by a dollar an hour, to $30.20 this year and another dollar an hour each of the next two years. Starting pay would be raised by 50 cents an hour to $20.
The Teamsters have pointed to Costco’s strong financial results as an argument for an improved wage and benefits package. Costco reported record annual net income in the most recent fiscal year of $7.4 billion — up 17% from a year earlier and nearly double what it earned in 2019 ahead of the Covid-19 pandemic. At a recent union rally held outside Costco’s annual meeting, union members held banners reading: “Pro worker? Prove it!” and “Record profits = record contract.”
Last year, the Teamsters staged a five-day strike at Amazon that ended the day after Christmas. But unlike the situation at Costco, Amazon does not recognize the union as representing any of its workers and has refused to negotiate, let alone agree to terms on a contract. Amazon doesn’t even recognize that many of the strikers, who are officially drivers for third-party delivery services despite exclusively delivering packages for the online retailer, are its employees.
This is a developing story. It will be updated.
