- Some 18,000 Costco workers might walk off the job on Saturday when their contract expires.
- Ahead of the deadline, Costco announced pay raises for non-union employees.
- That move might have unintended consequences, a legal expert told BI.
The clock is ticking for Costco to strike a deal with 18,000 unionized warehouse workers threatening to strike.
The company has been negotiating with the union, Costco Teamsters, ahead of the expiration of their existing contract at the end of the day on January 31.
Against that backdrop, the company announced this week in a widely circulated memo that its 2025 Employee Agreement, which covers its nonunionized employees, would include successive pay raises that push compensation to over $30 an hour for workers at the top of its pay scale. A spokesperson from Costco did not respond to multiple requests for comment.
Andrea Schneider, a law professor at Yeshiva University who is an expert in conflict resolution, told Business Insider that Costco likely made the announcement to lessen “the incentive for a strike” by assuaging concerns about stagnant wages. Compensation is commonly the motivating factor behind a work stoppage.
She added that the pay raise proposal could be the same one that Costco management offered the union. While it’s a smart PR move, it might have unintended consequences, she said.
“I think Costco’s response to immediately grant the salary increases to everybody is in some way to lessen that chatter and to say, ‘Well, you don’t need the Teamsters. We’ll take good care of you. Trust us to do the right thing,'” Schneider said. “Now, the Teamsters are in a position where they have to get more than what the non-unionized would get.”
Matt McQuaid, a Teamsters spokesperson, told BI that wages, pensions, and increased protections of union rights are the outstanding issues at the bargaining table on which the parties have yet to agree.
“There are still 18,000 unionized workers who know their worth and are demanding it,” McQuaid said in a statement. “Don’t forget Costco wouldn’t even be entertaining this increase if not for the immense pressure the Teamsters are putting on them to respect their employees.”
On social media, the Teamsters said Costco is offering low raises compared to the $7.4 billion in profits the company reported last year.
“So how’s the company rewarding workers? By proposing less than 3 percent raises, kicking workers just $1 in the first year of a new contract. That’s not even enough to buy a Costco hot dog,” the union said in a Facebook post.
Earlier this month, the union voted “overwhelmingly” to go on strike should the company and the union fail to reach an agreement by the Friday night deadline.
With such strong support within the union, Schneider said Costco may have put itself in a tricky spot despite trying to protect its worker-friendly image.
“In some ways, they’ve made it more difficult for themselves because the union is not going to back down unless there’s something more,” she said. “Either there’s going to be more money for the union, which is, I think, going to be very hard, or there’s going to be some other kinds of benefits or protections or something like that that has to roll out for the union because the Teamsters need to demonstrate their worth. These 18,000 members are paying union dues, they’re taking time to organize, they’re threatening the strike. They’ve got to get something for that.”
