A potential strike at 56 Costco stores across six states has been temporarily avoided, as the company and Teamsters union negotiators, representing 18,000 workers, reached a last-minute tentative agreement, the union informedearly Saturday morning.
The full details of the agreement were not immediately disclosed. Had the strike proceeded, it would have been the largest ever at a U.S. retail chain and the first in Costco’s history.
Beyond wages and benefits, the union’s demands included provisions for seniority pay, paid family leave, bereavement policies, sick time, and protections against surveillance.
The agreement, which was reached several hours after the contract expired at 11:59 p.m. PT on Friday, does not entirely eliminate the risk of a strike.
The deal must still be ratified by the union’s rank-and-file members at Costco before taking effect. While most tentative agreements do eventually become final contracts, there have been exceptions. Last fall, unionized Boeing workers rejected a tentative deal negotiated by their union leadership, leading to a strike that lasted two months.
Teamsters members at Costco represent 8% of the company’s 219,000 employees at its 616 U.S. locations, according to company filings. A strike by 18,000 workers would have had a notable impact, particularly in the largely non-unionized retail sector.
Data from the Labor Department indicates that fewer than 5% of retail workers nationwide are unionized, with most belonging to grocery store unions.
Neither Costco nor the union has publicly identified the specific locations of the unionized stores. However, the union confirmed they are located in six states along both the East and West Coasts—Maryland, New Jersey, New York, and Virginia, as well as California and Washington state, where Costco’s corporate headquarters is based.
Costco had previously stated on Friday that, even if its unionized workers had gone on strike, “all of our locations will be open for business this weekend,” suggesting the company planned to rely on management and non-union staff to continue operations.
Costco Wholesale Chain (Photo: Getty Images)Although the Teamsters represent only a fraction of Costco’s workforce, the union was prepared to establish picket lines at an undisclosed number of non-union Costco stores across the country, even if employees at those locations remained on the job.
Such a move could have significantly increased the economic strain on the company. While only 18,000 Costco workers are Teamsters members, the union has a nationwide membership of over 1 million that it could mobilize for picket lines.
Costco is known for offering comparatively strong wages and benefits, especially relative to other retailers. The company’s annual filings state: “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.”
The company confirmed a Reuters report that it recently informed employees at non-union stores of an upcoming wage increase. Costco announced it was raising hourly pay by $1 to $30.20 this year, with additional $1-per-hour increases set for the following two years. Starting wages would also increase by $0.50 per hour to $20.
The Teamsters have cited Costco’s strong financial performance as justification for improved wages and benefits. The company posted record annual net income of $7.4 billion in its most recent fiscal year—up 17% from the previous year and nearly double its pre-pandemic earnings in 2019.
At a recent union rally outside Costco’s annual shareholder meeting, workers carried signs that read: “Pro worker? Prove it!” and “Record profits = record contract.”
Last year, the Teamsters led a five-day strike against Amazon that ended the day after Christmas. However, unlike at Costco, Amazon does not recognize the union as representing any of its employees and has refused to negotiate a contract.
The online retailer also does not acknowledge that many of the striking workers—who are officially employed by third-party delivery service providers but exclusively handle Amazon packages—are its employees.
