Topline
Costco and the International Brother of Teamsters union came to a tentative three-year contract agreement at the 11th hour, averting a strike that would have affected operations at more than 50 Costco stores starting today, according to the Associated Press.
Key Facts
Some 18,000 Costco unionized workers – about 8% of its total 219,000 U.S. employees – were set to go on strike today after failing to reach a contract agreement with the company.
Operations at 56 stores in Maryland, New Jersey, New York, California and Washington would have been impacted
Costco said regardless of a strike, it was prepared to keep all locations open for business throughout, as reported by CNN.
The Teamsters were also prepared to set up picket lines at a number of non-union Costco stores in support.
The contract remains to be ratified by Costco union members before it goes into effect.
Background
On January 20, Costco Teamster members voted to strike when the current contract expired at 11:59 p.m. on January 31. After weeks of negotiations, Costco and the Teamsters couldn’t come to an agreement with the union asking for improved seniority pay, paid family leave, bereavement policies, sick time and safeguards against surveillance. Apparently those issues have been resolved to both parties’ satisfaction.
Tangent
Just days before the scheduled strike, Costco announced that all hourly, non-union employees would get a pay raise and improved benefits. Those at the top of Costco’s pay scale would receive a $1 per hour raise to $30.20 per hour and a $1 per hour raise each of the following two years. Those at the lower-end of the pay scale would see a $0.50 per hour raise, taking starting pay to $20 per hour, well above the roughly $16 per hour median pay for retail workers.
What We Don’t Know
As of posting, no specifics about the terms of the new contract have been announced by either Costco or the Teamsters. However, labor relations attorney Jane Jacobs, partner at Tarter Krinsky & Drogin law firm, shared with me that the most likely sticking point in contract negotiations was the provision for seniority pay. The announced scaled pay raises for non-union employees suggest the company made concessions there. She also said it is typical for a company with union and non-union employees to give equal pay and benefits to all workers.
Surprising Facts
Pro-union sentiment is growing strongly across the country. Gallup found 70% of adult Americans polled in August last year had a positive opinion of unions, up from 48% in August 2019. Since Sean O’Brien became president of the Teamsters in March 2022, the union’s membership has grown by 70,000 new members, up from the 57,000 new members added over the entire previous decade.
Costco and Teamsters Reach a Tentative Deal to Avert a Strike (CNNBusiness, 2/1/2025)
Costco, Teamsters Reach Tentative Contract Agreement, Avoiding a Strike (AP, 2/1/2025)
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