Costco and Teamsters Finalize Tentative Deal to Prevent Strike
United States, Saturday, 1 February 2025.
A new tentative agreement between Costco and the Teamsters union has averted a major strike at 56 stores, preserving operations and preventing potential supply chain disruptions.
Deal Details and Timing
Costco (NASDAQ: COST) and the Teamsters union reached a tentative labor agreement on January 31, 2025, just hours after the previous contract expired at 11:59 p.m. PT on January 30 [1][2]. The agreement covers 18,000 workers across six states - California, Washington, Maryland, Virginia, New Jersey, and New York - representing approximately 8% of Costco’s total U.S. workforce of 219,000 employees [1][3].
Financial Context and Worker Benefits
The negotiations took place against a backdrop of strong financial performance, with Costco reporting a net income of $7.36 billion in its most recent fiscal year, representing a significant increase from 2019 [2]. Prior to the agreement, Costco had announced plans to raise pay for top clerks to $30.20 per hour starting March 2025, with additional $1 increases planned for the following two years, while entry-level wages were set to increase to $20 per hour [3].
Key Negotiation Points
The agreement addressed several critical issues including wages, benefits, seniority pay, paid family leave, bereavement policies, sick time, and safeguards against surveillance [1]. This deal comes at a time when union representation in retail remains relatively rare, with less than 5% of retail workers being unionized [1].
Next Steps and Implementation
While the tentative agreement marks a significant milestone, it still requires ratification by rank-and-file union members before becoming official [1][2]. Costco has maintained its commitment to providing industry-leading wages and benefits, with CEO Ron Vachris emphasizing the company’s philosophy of exceeding industry averages to reduce turnover and enhance productivity [3].