More than 18,000 Costco workers are preparing to strike if the company fails to agree to contract terms reflecting its record-breaking profits by January 31, 2025. The Teamsters union, representing these employees, accuses Costco of rejecting nearly all of its proposals, describing the retailer's position as 'aggressive' and 'anti-union'. This potential strike could disrupt operations across over 600 Costco locations throughout the United States, putting significant pressure on the retail giant amid rising worker activism.
The Teamsters are pushing for improved paid family leave, enhanced seniority rights, increased sick time, and protections against workplace surveillance. Union leaders express concern about Costco's unwillingness to negotiate meaningfully. "Costco is known for offering higher wages than competitors, but it is failing to provide contracts..." stated Sean M. O'Brien, the Teamsters General President. According to him, Costco has rejected 98% of the union's proposals, showcasing what he refers to as their 'troubling unwillingness to bargain'.
Despite the growing tension, Costco executives maintain their commitment to reaching a fair agreement. During a recent earnings call, CEO Ron Vachris reiterated the company's appreciation for its relationship with the union, saying, "We have a 40-year track record of dealing fairly with the Teamsters union," though he declined to comment on specific negotiations.
Costco's profits soared to £5.9 billion ($7.4 billion) last year, yet many workers feel this financial success should translate to enhanced compensation and benefits. Since the Teamsters’ last contract renewal, Costco's revenues have jumped by 12%, reaching £200 billion ($249.6 billion).
Alongside the potential strike, the Teamsters have demonstrated their organizational strength, evidenced by a December 2024 strike vote where more than 85% of members supported the decision to strike. Practice pickets have already been organized at strategic locations including Hayward, California; Sumner, Washington; and Long Island, New York. O'Brien insists workers will not agree to anything less than a 'historic, industry-leading' agreement as the January 31 deadline approaches.
This labor conflict coincides with wider political pressure against Costco, led by Ohio Attorney General Dave Yost and 18 other Republican Attorneys General who are demanding the retailer drop its diversity, equity, and inclusion (DEI) policies. They claim these policies are divisive and discriminatory, arguing, "Although Costco’s motto is 'do the right thing,' it appears..." violating its own principles by adhering to these policies. The letter sent to Costco's CEO, Ron Vachris, set a 30-day deadline to abandon the DEI programs, or faced scrutiny explaining their persistence.
Despite this pressure, Costco shareholders voted recently to maintain the company’s DEI policies, indicating strong internal support for inclusiveness. Senator Bill DeMora, representing Democrats, criticized Yost's actions as self-serving, remarking, “How could a government force a private company... it’s ludicrous.” He also encouraged shoppers who support Costco's DEI stances to continue patronizing the company, stating, “If Costco wants to keep these DEI principles, I for one applaud them.”
The squeeze for Costco is evident, with the Teamsters ramping up their efforts against major retailers, including Amazon. The union recently staged strikes affecting nine Amazon fulfillment centers, advocating for improved wages and working conditions. Tensions continue as Amazon fails to recognize the Teamsters as official representatives, setting the stage for potential confrontation.
With less than 24 hours before the strike deadline, both Costco and the Teamsters face mounting pressures. If workers proceed with their strike, it could significantly disrupt operations and supply chains, impacting Costco’s millions of customers across the nation.
This situation not only spotlights the immediate concerns of Costco workers but also reflects broader national trends of workers asserting rights within corporate environments, alongside contentious debates on corporate diversity efforts. The intersection of labor disputes and corporate governance underlines the urgency of negotiations and the need for resolutions conducive to both employee welfare and corporate interests.