Costco Releases Surprising Statement in the Wake of Unionization

By: Ben Campbell | Published: Jan 08, 2024

Costco’s CEO has issued an apology to their workers following the recent unionization of a warehouse in the city of Norfolk, Virginia. 

Following the workers’ vote to unionize, Costco’s CEO put the blame on the company themselves after realizing the retail giant failed to meet the needs of the workers. 

CEO Shocks Workers by Accepting Blame

Costco’s former CEO, Craig Jelinek, shocked the internet by admitting the company was disappointed in itself and didn’t blame the employees who decided to unionize. 

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Former Costco CEO Craig Jelinek stands in front of an audience and prepares to give a speech

Source: @_Smilewhileudie/X

“We’re not disappointed in our employees; we’re disappointed in ourselves as managers and leaders,” wrote Jelinek in a letter to employees. 

Memo Published to Reddit

Former president and current CEO Ron Vachris also contributed to the letter that an employee later shared on Reddit.

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Costco’s new CEO Ron Vachris pictured with former CEO Chris Jelinek and an employee

Source: @Klreagan73/X

“The fact that a majority of Norfolk employees felt that they wanted or needed a union constitutes a failure on our part,” they said.

Costco Claims They Aren’t Anti-Union

Towards the end of the letter, the CEO, speaking on behalf of the company, claimed they aren’t anti-union and value the needs of their employees. 

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Photograph taken at the entrance of a large Costco Wholesale warehouse

Source: @AndyVermaut/X

“At Costco, we take great pride in our relationships with each other,” the letter continued. “We’re not anti-union, but our core value of “taking care of our employees” has never been the result of any union,” they wrote

Employees Join Teamsters

Last week, Teamsters announced over 238 of the warehouse workers at the Norfolk location had joined the labor union. 

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Members of a Teamsters union movement are pictured at the side of the road during a strike

Source: Bill Pugliano/Getty Images

According to Fast Company, the workers will hopefully receive an hourly pay increase. Costco will also be asked to contribute more to their pensions and raise semiannual bonuses. 

Costco Employees at Norfolk Set for Payrise

The unionization at Norfolk came just a year after Teamsters secured an agreement with Costco to increase employee pay and benefits. 

Costco employee pictured at the meat station inside one of their large warehouses

Source: Justin Sullivan/Getty Images

According to a Teamsters representative, Costco workers will begin seeing “significant wage improvements.”

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Union Ensures Costco Lives up to its Image

Teamsters are happy with the progress they’ve made with Costco. After the workers at Norfolk successfully unionized, the Labor Union released a statement. 

Image inside a Costco warehouse, which shows pallets full of bulk items, including water

Source: @pgcornwell/X

“Together, as Teamsters, we’ll make sure Costco lives up to the worker-friendly image it likes to project to the public,” said a representative from Teamsters. 

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Costco Manager Agrees With the Letter

A Costco manager from a store in California recently shared his opinion about the letter with Business Insider

The sales manager at Costco checks customers' receipts as they leave the warehouse store

Source: Tim Boyle/Getty Images

He said, “I agreed with that letter wholeheartedly because that means over 50% of those employees felt like they couldn’t go to management with issues, or they went to management and couldn’t get their issues resolved in a way they deemed fit.”

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Manager Scared to Speak Out

Under fear of being persecuted for his comments, the manager requested to remain anonymous to the media. However, he did mention he prefers working in locations that have not yet unionized. 

Shopping carriages are lined up outside of a recently opened Costco warehouse store in New York City.

Source: Spencer Platt/Getty Images

“It was disheartening for that location to vote to be in a union, but at the same time, it’s a good time for us to reflect and be like, ‘Maybe we need to retrain management’,” he added.

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Teamsters Continue Building Up Costco Members

With the recent addition of 238 more union members from the Norfolk warehouse, Teamsters represent approximately 18,000 Costco employees. 

Large group of protestors gather together in the street with their hands raised in the air

Source: Freepik

This amounts to around 5% of Costco’s total workforce at over a fifth of the company’s 600 locations in the United States.

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Manager in Texas Share Opinion on Pay

Another manager from a warehouse in Texas believes the company would prosper and even see less unionization if they increased the annual pay increase from 50 cents. 

Bulk-buy warehouse store manager wearing a white and black shirt counts inventory

Source: Freepik

While Costco still pays some of the highest wages in the nation when compared to Target or Walmart, the manager claims the competitors are still gaining ground.  

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Amazon Not so Happy About Unionization

The response from Costco is considered lighthearted when compared to the response from Amazon following unionization efforts at a Staten Island Warehouse in 2022. 

Photograph of Amazon founder Jeff Bezos during a speech

Source: @VladoBotsvadze/X

“We believe having a direct relationship with the company is best for our employees,” said a representative from Amazon. They went on to accuse the National Labor Relations Board of “undue influence.”

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