Costco and the Teamsters reach tentative agreed on a new contract, avoiding strike

Costco and the Teamsters union have struck a tentative deal on a new contract, averting a strike, the union said Saturday.

Teamsters spokesperson Matthew McQuaid acknowledged the deal, which must be ratified by members. Details of the arrangement were not immediately available.

The Teamsters union represents 18,000 Costco employees in six states, including California, Washington, Maryland, Virginia, New Jersey, and New York. Costco employs 219,000 people in the United States and has 617 locations there. The corporation stated that its labor agreement with the Teamsters covers fewer than 10% of those locations.

After Costco purchased the company in the 1990s, the group changed its name to Costco Teamsters and has since grown. It is affiliated with the International Brotherhood of Teamsters, a union that represents 1.3 million workers in the United States, Canada, and Puerto Rico.

On Jan. 20, Costco Teamsters members voted decisively in support of going on strike if a new three-year contract deal was not negotiated by midnight Friday, when the existing contract ended.

Union members wanted the Issaquah, Washington-based corporation to make a contract offer that reflected its sales and profit growth. Costco's revenue increased 5% to $254 billion in the most recent fiscal year, which concluded on September 1. The corporation recorded $7.36 billion in net profits, more than double its earnings from 2019.

Costco has a reputation for offering competitive salary and benefits, especially when compared to other retail businesses. 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.”