New York (CNN) — Costco Strike Averted with Tentative Agreement

A potential strike at 56 Costco stores across six states has been temporarily avoided as the company and the Teamsters union, representing 18,000 workers, reached a last-minute tentative agreement, the union confirmed early Saturday morning.

Tentative Agreement Reached

The full terms of the deal were not immediately disclosed, and Costco has not yet commented. If the strike had proceeded, it would have been the largest in U.S. retail history and the first-ever at Costco.

Beyond wages and benefits, the union pushed for seniority pay, paid family leave, bereavement policies, sick time, and safeguards against surveillance.

The agreement, reached hours after the previous contract expired at 11:59 PM PT Friday, does not fully eliminate the strike risk. It still requires ratification by union members before it takes effect. Historically, most tentative agreements lead to final contracts, but exceptions exist—such as last year’s Boeing strike, which began after workers rejected a tentative deal.

Impact of a Potential Strike

The 18,000 unionized Teamsters at Costco represent 8% of the company’s 219,000 U.S. employees at 616 locations. While a strike at these stores would be significant, Costco had previously stated that it planned to keep all locations open using management and non-union staff.

The unionized stores are spread across six states along the East and West Coasts:

Maryland
New Jersey
New York
Virginia
California
Washington (Costco’s corporate home state)

In addition to striking at unionized locations, the Teamsters were prepared to set up picket lines at non-union Costco stores nationwide, potentially increasing economic pressure on the company. With over 1 million Teamsters members nationwide, the union had the ability to expand picketing efforts beyond Costco’s workforce.

Costco’s Compensation & Financial Success

Costco is known for competitive wages and benefits, often exceeding industry standards. The company’s filings emphasize that its philosophy is not to minimize wages and benefits but rather to reduce employee turnover, increase productivity, and enhance satisfaction.

In response to recent union pressure, Costco confirmed a pay increase at non-union stores:

$1 per hour increase to $30.20 this year
Additional $1 per hour increases over the next two years
Starting pay raised by 50 cents to $20 per hour

The Teamsters argue that Costco’s record-breaking financial performance justifies a stronger wage and benefits package. The company reported a record $7.4 billion in annual net income, a 17% increase from the previous year and nearly double its pre-pandemic earnings. At a recent rally outside Costco’s annual meeting, union members displayed banners reading “Pro worker? Prove it!” and “Record profits = Record contract.”

Comparison to Amazon’s Labor Disputes

Last year, the Teamsters staged a five-day strike at Amazon, though unlike Costco, Amazon refuses to recognize the union or negotiate any contract. Amazon also disputes that many of the strikers—who deliver its packages via third-party services—are its employees.

While Costco has a strong labor reputation, the union fight highlights the growing push for higher wages and worker protections in a company that continues to post record-breaking financial success.

What’s Next?

The next step is for Costco’s unionized workforce to vote on the agreement. If rejected, the threat of a strike remains, which could disrupt operations at dozens of locations. If ratified, the deal will likely set a precedent for future labor negotiations in retail.

Stay tuned for updates as the ratification process unfolds.