Phelan M. Ebenhack via AP
People park outside of a newly opened Costco Wholesale warehouse location, November 21, 2023, in Clermont, Florida.
Bosses often try to fend off union drives by pleading that workers and management are family. But Costco put its contrite-boss act in writing after a group of 289 workers at its 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.” In other words: “It’s not you, it’s us!”
CNN praised the bosses, presenting Costco’s humble response as a counterweight to the implacable anti-union hostility of name-brand corporate giants like Starbucks and Amazon. Costco has always cultivated this image. But its workers in Norfolk wanted the power and security of a union anyway.
The victory comes after Costco workers narrowly lost a union election in 2019 in Washington state by just six votes. The 111-92 vote at the Norfolk store was also fairly close. But the Teamsters had an advantage in Virginia that is not well known to the public: an already-unionized Costco store a couple of hours north in Glen Allen.
The Teamsters established a beachhead at Costco in 1993, when the retailer acquired its rival Price Club and inherited that company’s unionized workforce. Costco warehouses in Michigan, Washington state, New York, New Jersey, and Maryland are also unionized with the Teamsters. Today, the Teamsters represent 18,000 of Costco’s 208,000 workers in the U.S. and Puerto Rico. The degree to which Costco jobs are good jobs is in part thanks to the unionized stores.
In October 2022, the Teamsters ratified the first-ever national Costco master agreement for their union members. “Don’t let anyone tell you the days of achieving national master agreements are over,” said Teamsters president Sean O’Brien at the time. “Unions can protect American workers on a national scale—the Teamsters just proved it at Costco.”
But that contract excluded workers at the 544 non-union Costco stores, like the one in Norfolk.
Of the 56 unionized Costco stores, 40 are located in California. A win outside of the West Coast stronghold represents a significant organizing victory for the workers in Norfolk and the Teamsters, and could lead to other Costco workers seeing the collective power in a union.
Non-union Costco stores have no formal grievance process. Workers tried running complaints up the chain of command from local store managers to regional directors. After all, Costco was known for its open-door policy and frictionless relationships between workers and management. But at the Norfolk store, workers said they instead saw those doors slap shut, and the anger reached a boiling point.
In response to the company’s public mea culpa, Torrey Felton, a forklift driver at the Norfolk store, had a pithy riposte: “Show us. Don’t tell us. We’ve been doing a lot in the last two to three years. We were beat down, mistreated, physically abused, harassed, retaliated—people lost their careers.”
Claire Macsalka, a deli worker, has been with Costco for 17 years, hiring into the company in Denver, Colorado. She transferred to the Norfolk store in 2022, and a year later stepped into a management role. “They were going through managers,” said Macsalka. “We had five managers in the time of six months in the department that I was in.”
After ten days in the gig, she stepped down. “I quickly saw that the management style at the Costco in Norfolk was not one that I could align with,” said Macsalka. “I’m into building teams, not breaking people down.”
To break people down, workers said managers put them in the chicken room, where deli workers cook rotisserie chicken in 450-degree ovens. If workers raised food safety issues, Macsalka said managers would retaliate by scheduling them to work physically grueling jobs in these sweltering rooms. “You’re lifting 70-pound boxes, and 30 pounds over your head or doing 30-pound squats all day in front of hot ovens,” she said.
Macsalka alleged that managers would time her bathroom breaks. “I’ve been personally harassed because I take medication for my heart,” she said. “That’s a diuretic. That makes me have to use the bathroom. So if I have to use the bathroom one hour into my shift, I have to check in with my manager. Get timed. Run to the bathroom as fast as possible and get back. So I’ve had to explain my medical issues to the whole department in order to be able to use the bathroom without harassment.”
Costco didn’t respond to a request for comment.
THESE EXAMPLES CUT AGAINST THE POPULAR IMAGE of Costco as an exception among large retail companies, a reputation that still has some truth to it, though in other respects things have changed. Macsalka and Felton earn about $30 an hour. The company’s benefit package for non-union stores, while it has eroded, was once lucrative, including 401(k) contributions, stock options, and generous sick leave, personal time, and vacation. The company no longer offers stock options and has changed how it allocates personal time off for non-union stores.
“My aim is to not bad-mouth the company right now,” said Fernando Pérez, who launched the union drive last May after walking into Teamsters Local 882’s union hall asking to speak with an organizer. Thanks to his nine years at Costco, Pérez said, “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.”
Workers credited the company’s corporate culture for making it a good place to work. In the 2012 CNBC documentary The Costco Craze: Inside the Warehouse Giant, co-founder and former CEO Jim Sinegal, who stepped down that year, reflected on the necessary evolutionary changes the company must undergo: “Now, the question is, what happens to the culture? Do we have the same values? Culture isn’t the most important thing. It’s the only thing.”
These priorities attracted workers. Felton told me he came to work for Costco seven years ago after watching the documentary and becoming impressed with Sinegal’s focus on taking care of his employees. Damion Thomas, a front-end cashier with 15 years on the job, hired in at Costco in Lakewood, California, during the Great Recession, after reading an article that the retailer was entertaining a four-day workweek, which never materialized.
Thomas had nothing but positive experiences with the company, mentioning by their first names managers who had helped him along. All that changed when, seeking to be closer to family on the East Coast, he transferred to Virginia in 2021.
A win outside of the West Coast stronghold represents a significant organizing victory for the workers in Norfolk and the Teamsters.
A top performer, Thomas helped his stores set records on membership upgrades, a key part of how Costco makes its money and a signature aspect of its innovation in the retail sector. In his time at the Norfolk store, memberships grew from 50,000 to 80,000. Yet managers kept the store understaffed until the union campaign was under way, after which they hired 30 to 40 new full-time employees in an effort to dilute union support.
“The cashiers were struggling up there, and it was hard to get a [membership] upgrade,” he said. Thomas was a latecomer to the campaign, only getting involved three months after launch. A respected worker, he won many co-workers over to the union drive.
Workers at the Norfolk store and elsewhere told me that since the pandemic, Costco had become less of a symbol of a good-paying retail job with benefits, and more an emblem of punishing corporate metrics and indifference to workers. “As time has progressed, they cared less and less about our families, less for the name of the employee and more for 684909,” said Pérez, referencing his employee number.
Even some managers are disgruntled over the company’s punitive policies. In the South, one manager has grown disenchanted, pointing to changes to sick leave and strict attendance policies. In one particular instance, the manager, who asked for anonymity to speak openly and who was hired in as a part-time worker five years ago and worked up to a management role, recalled joining a disciplinary meeting as a witness for a worker who had come into work late, police report in hand, after a car accident. The report stayed on the worker’s file for a year.
“If she ever wants to transfer to another warehouse or another department, they’re gonna pull her file and [this write-up] will be in there,” he said. “They just want these policies to be so black-and-white, but we need the gray area for people.”
Numerous employees at the Norfolk store explained that Costco began to make exceptions to the worker-friendly sections of the company rulebook, while always using the same excuse.
“They would always use the term ‘needs of the business,’” said Pérez. “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 the needs of 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.”
James Watson, a gas station attendant at the company since 2014, said he got involved in the union drive because of worsening company culture. In 2022, Watson transferred to Newport News, Virginia, for a job in Costco’s meat-cutting department, because a worker there was retiring. He took the manager at his word that he would get trained to be become a cutter, switching from a full-time position at Norfolk to a part-time position and a pay decrease.
“But as we got closer to the holidays, they kind of they stopped allocating that time to do the extra training,” said Watson. “And ultimately, I came to find out that they weren’t going to train me to replace the retiring cutter. They instead brought in a new cutting machine and they were just going to take in a transfer from another store who was already trained to cut meat to fill that position.”
According to Costco’s employee handbook, his seniority rights should have been honored. But managers used a phrase citing “skill on the job” to hire over Watson. While the employee handbook was based on the Teamsters contract, it wasn’t enforceable.
“They were willing to either screw over or deceive an employee as long as it was for the needs of the business,” Watson said. “And one of the company’s core mission statements is to take care of the employees.”
TWO YEARS BEFORE COVID, Pérez said managers told him they’d never bring self-checkout to Costco. The next year, he noticed, the company put in self-checkout machines, with managers justifying the change by saying: “It saves so much money, and self-check machines never call out.”
That was the impetus for Pérez to reach out to the Teamsters, learning from online research that they already represented Costco workers. He said they had exhausted the corporate channels to make changes. “Something has to change,” said Felton. “Because we’ve called home office, we’ve written letters to different managers. That’s when the union came into play.”
Soon, Felton realized what he saw in Costco initially as an employer wasn’t benevolence from top management, but concessions extracted through worker power. “It’s not like Costco itself is saying, ‘Hey, we’re gonna give this rate of pay and [these] benefits.’ No, it’s the union that’s already been there that’s fighting for those things.”
Since workers unionized, they’ve already seen the fruits of their organizing pay off. Workers say the company has replaced an abusive general manager, bought new equipment, fixed broken cameras in the company parking lot where cars were broken into, and hired more staff.
“The building has changed overnight,” said Pérez. “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 to 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.”
“We talked a lot about the union being us,” said Macsalka. “If the change is going to come, we have to come together as a group and say, ‘We want a better system.’”
Negotiating a binding collective-bargaining agreement is the next step for Norfolk Costco Teamsters and their employer. Can workers and the Teamsters union build off the organizing momentum at Costco? National contract negotiations between the Teamsters and Costco begin in January 2025.
