The Unionization Wave Is Hitting Costco
Costco workers in Norfolk, Virginia, recently unionized, defying the company’s reputation as one that cares about workers. In an interview, a Costco worker says he and his coworkers are tired of being treated with disrespect on the job.
A Costco store in Bayonne, New Jersey, US, on December 9, 2023. (Angus Mordant / Bloomberg via Getty Images)
- Interview by
- Luis Feliz Leon
Costco’s executives are eyeballing the number 18,238 and plastering letters of contrition in break rooms after workers at the wholesale retail chain’s Norfolk, Virginia, store voted to join Teamsters Local 822 in late December.
“We’re not disappointed in our employees; we’re disappointed in ourselves as managers and leaders,” wrote outgoing CEO Craig Jelinek and then president and now CEO Ron Vachris in a memo on December 29. “The fact that a majority of Norfolk employees felt that they wanted or needed a union constitutes a failure on our part.”
This pattern — contrition, apology, vows to do better — is nothing new in the union-busting playbook. But Costco was supposedly one of the good, high-road employers with an enlightened management that put workers first and invested in them. That’s why it was credited with one of the highest retention rates in the industry.
The union victory in Virginia comes after workers narrowly lost a union election in 2019 in Washington State, forty voting against and thirty-four in favor of joining Teamsters Local 174. The one hundred eleven to ninety-two vote at the Norfolk store was fairly close. But the Teamsters already represented workers at another Glen Allen, Virginia, store, which unionized in 2004.
With the labor movement on the upswing, the successful union drive represents a significant organizing victory for the workers in Norfolk and the Teamsters outside of its stronghold in California, where forty of the fifty-six union stores are located. The union established a beachhead at the retailer in 1993 when Costco acquired its rival Price Club, inheriting that company’s unionized workforce. Today, the Teamsters represent eighteen thousand of Costco’s 208,000 workers spread across six hundred stores in the United States and Puerto Rico.
In October 2022, the Teamsters ratified the first-ever national master agreement for its eighteen thousand–strong union members. With a contract expiration date of 2025, will the Teamsters go into negotiations with newly organized stores at the table?
I spoke with Costco cashier Fernando Pérez to talk about why he and his coworkers decided to unionize their store. We spoke about how the company’s culture has changed over the past years, what specific issues at work motivated him to launch union drive with his coworkers, and what other workers can learn from their organizing. The conversation has been lightly edited and condensed for clarity.
Tell me a bit about yourself and how you came to work at Costco.
I started at Costco in 2013–2014 as a seasonal employee. At the time they were paying $4 more than what everyone else was paying, and they were saying they treat employees well — they care about your vacation time, you can get insurance while you’re still part time. It seemed like a great fit.
All season I tried really hard and they had to let me go and they told me, “We’ll give you a call.” I didn’t expect much from it, because I’ve heard that before. And then six months later, they did give me a call. I’ve been working at Costco ever since.
This is my fourth building that I’ve worked in, and in that time, I’ve learned a lot. Currently, I’m a cashier on the front end, but I’ve helped in the deli, helped push carts. I believe I’m at $28 an hour.
Tell me how you and your coworkers made the decision to get involved in an organizing drive.
We noticed that there was a culture change at Costco. Management seemed like they were harder to talk to, and we didn’t feel like we were as appreciated as in the past.
They would use the term “needs of the business.” So for example, if you put in a schedule request, they would deny it, and instead of giving you a legitimate reason, they would just say, “Oh well, it’s a need of the business,” or if you needed extra time to do a task, they would say, “You’re not meeting the expectation, it’s a need of the business.” And I can understand it to an extent, but we are the employees — we are the needs of the business. I mean, you can’t run Costco without us.
I started hearing “needs of the business” just before COVID, and it seemed that it became more and more frequent. Nine years ago, I would never hear “needs of the business” as an excuse when you’re asking for help or when you need training or when you need vacation time or when you need some time off for family issues.
It sounds like most workers at Costco are loyal to the company and stay at the company for decades. You yourself have been there for nine years. What were those conversations like when you were trying to organize with your coworkers and persuade them like, hey guys, we need a union to address these problems?
A lot of it came from some of the older employees. I would ask them advice, like, “Hey, we’re thinking about doing this thing,” and I wouldn’t say there was any older employee that was against it. Most of the older employees have been there twenty-five years plus, and they were like, “Yes, the company has changed, and I don’t think you’re gonna have as fair of a shot as we had.” It was really about the loss of respect as time went along.
We have benchmarks — you have to ring a certain amount of members [customers] per hour. So you may have a member that has five hundred items, and you’re expected to ring it in the same amount of time as for someone who just has one item. There’s no leniency, and the benchmark isn’t written down anywhere. And if you’re an employee who may be having a harder time, for whatever reason, they don’t train you or teach you. They just keep moving the goalposts to make sure that there’s always people, five to ten employees, that are under this new line, so that they can write them up to get demoted, to cut their pay.
And if you don’t meet expectations, they say, “would you be willing to step down,” and give you a paper to sign — it’s almost like harassment. They don’t give you any real options. They don’t let you have a witness in there either. It’s just you and the manager. It’s not fair to someone who may have been with the company twenty years, and they can’t keep up with someone who’s just started last week.
When I first started, we were all about “member service” —customer service. You’re the face of the company, so you’re supposed to make people smile when they come to your line. Being fast and efficient comes with that too. But you’re supposed to ask, “How are you doing today? Did you find everything you needed?” With those metrics, they keep pushing us further and further. It doesn’t allow us to do the job how we want to do it.
Take me to the day when you decided the answer to these problems is a union. How did you and your coworkers come to that decision? Why the Teamsters? How did that happen?
There were a couple of people who put the idea out there. Like “Hey, what do you guys think about this?” So I did some research online. I knew there were some union buildings that were Costco, with contracts run by the Teamsters. And I was like, that seems like an easy thing — I’ll just go talk to them and see what benefits they think we can get.
I just knocked on the door [of the union hall] and was like, “Hey, we’re thinking about unionizing Costco, right around the corner.” And they were like, “Yeah, we’ll get you information today.” So they called me back, and as [Costco workers] started calling in and telling them their stories, and about management’s lack of respect, they were like, you guys need help. And it just kind of took off from there.
Costco still has that that name brand — that it’s a company that looks out for the employees, but I don’t think people realize the day-to-day expectations of a Costco employee. From the time we open up, that rush comes in. It’s fifty-five members per hour coming through my line.
So before you know it, it took off. After about two months, I think we had at least 45 percent of employees who had already filled out a card [expressing their support for the union]. It was super quick.
That’s amazing. What were the specific issues that you think motivated that many people to sign cards?
It seemed that any issues that you brought up were always “needs of the business.” So we’re supposed to be one-on-one — you have a packer and a cashier. And they would take your packer away and tell you oh, it’s needs of the business, we don’t have enough people right now. We’re trying to hire people, but we can’t find anybody. But then they would still hold you to that high number of productivity that can only really be met with the helper.
You’re supposed to be able to talk to any manager at any point about any issue, personal or work related. And any time you would bring something up, they would push you to the next person down on the totem pole. So if I wanted to talk to a manager, they tell you, “Oh go talk to your supervisor.” And then you go talk to that supervisor, and would they tell you, “Talk to other people.” Before you know it, you’ve talked to nine people and nothing’s been resolved. And when you do get an answer, it’s, “Well, it’s the needs of the business, you have to understand.”
And it was just interesting: once the word got out about the union, they hired like thirty people. So they can be kind of disingenuous.
I think people started realizing, “Oh, there’s so many things that Costco has never done in the past — they’ve never taken our packers away, they’ve never told us ‘needs of the business’ when we had to talk to a manager.” And I think people started realizing like, “Oh, it’s a ‘needs of the business’ type thing and less of a ‘needs of the employee.’”
I can give another example. I was on the front end. I was calling for a supervisor; there was a member cursing in my face. Everyone’s looking, the managers are looking, and I have to walk all the way up to the manager and ask for help. I was like, “Can you please help me,” and they don’t want to help you.
So I think having the ability to stand up for ourselves as a group to be like, “Oh, yeah, I’ll stand up with that person.” Because a lot of us are afraid to speak up against someone in management. Because we feel like “Oh, well now I’m going to be the next one on the list.”
How did management respond to the union drive?
They wanted to have a presence of always being around. Most managers leave the building for lunch or eat in the office. Once the union thing started coming out, there was always a manager in there eating their lunch around employees. They were just always around listening to our conversations or on the front end. There were a couple of days when all the managers lined up front and watched us work for like a couple hours, just standing there staring at us.
But if you would ask any one of the managers, they would be like, “I don’t know what you’re talking about. Yeah, we’re not unionizing. That’s something they do in California. That’s not our building.” I would say even to the last day and even today, they just don’t acknowledge it. You know? They’re like, “It’s business as usual.”
But the building has changed overnight. As soon as we got that yes, managers went back to how they were nine years ago — where they seemed like they want to talk you, caring, friendly, shaking your hand, asking about your family, seeing if you needed anything, making sure the packers are there, getting people hired and trained.
What did you do to overcome the boss’s anti-union campaign?
When we first started talking to people, when there was a scared employee, I would tell them, “Look, I’m still here. They know I’m a part of it, and I’m still here. Fill out the card, get more information, give the Teamsters a call.”
And in the larger anti-union meeting that they had, maybe three days before our vote, we spoke up. We didn’t let them talk down to us, we told them obvious grievances, and their response was, “This is the first time we’ve heard of this” — even though we’ve talked to management, we’ve called corporate. And they would tell us, “A union’s not going to change anything.” And one of the employees, Myeshaun, spoke up. She was like, “I have to disagree with you. Because as soon as corporate found out we were unionizing, things changed. They hired more people. They seem to be more respectful of our time. So many things have changed in such a short amount of time that you said was impossible because of the ‘needs of the business.’ And we don’t even have a union yet and they’re already treating us better.”
So I think that was the greatest defense — we’re not quiet. I’m not going to be quiet. You’re not going to be quiet. We’re going to keep standing up for ourselves every day at work.
My aim is to not bad-mouth the company right now. I started at Costco nine years ago. I got married, I bought a house, I bought my first real car that wasn’t a beat-up car. There are things that Costco has helped and has brought enrichment to my family.
At the same, as time has progressed, it seems like they care less and less about our families, less and less for the name of the employee, and more and more of “684909” — that’s my employee number — “You’re 684909, get back to the register, you gotta get to fifty-five.”
What did you think about Costco’s letter on December 29, saying that workers unionized because management failed? A lot of people in the press, were like, oh, wow, Costco is so different than Starbucks and Amazon. But it sounds like they fought tooth and nail to defeat the union drive.
They are still trying to hold on to the guise that they are a good company. So you have to read through it — the letter was more of a chastising letter to all the other buildings: “Norfolk is the bad egg. Don’t follow them. We’re gonna fix it.”
What comes next?
Contract negotiation.
Costco might seem like they’re trying to help us out, but to my understanding, they’re still trying to figure out if they’re going to “let us” into the main contract or not. And if you’re a company that says you want what’s best for us, you would make negotiations as easy as possible, right? You would want to give us anything that we asked within reason. I’m not saying that everyone should make $200,000. But within reason, there shouldn’t be any real pushback if you’re really watching out for what’s best for us.
So our next step is to continue to stand up for each other. And make Norfolk the best Costco, because everyone’s watching. We’re gonna have the best contract, we’re gonna try to make as many people happy as possible, and at the end of the day, we’re going to be the best Costco on the East Coast.
We’re just going to keep standing up for the person next to us. I think people will be surprised how quickly things can change when you just decide to stand up for the person next to you.