iStock.com/jetcityimage
In a tactic that surprised many, Costco’s management issued an apology to its employees rather than defend its work practices in response to one of its U.S. stores unionizing for the first time in two decades.
Last month, workers at a Costco store in Norfolk, Virginia, unionized with Teamsters in a 111-to-92 vote.
“To be honest, we’re disappointed by the result in Norfolk. We’re not disappointed in our employees; we’re disappointed in ourselves as managers and leaders,” wrote Costco CEO Craig Jelinek and President Ron Vachris in an email to employees. “The fact that a majority of Norfolk employees felt that they wanted or needed a union constitutes a failure on our part.”
The two executives added that Costco is “not anti-union, but our core value of ‘taking care of our employees’ has never been the result of any union. It’s been part of Costco’s Mission Statement and the foundation of our Employee Agreement from the very beginnings of Costco’s business.” They urged employees who have any doubts or questions about that commitment to reach out in order to continue to build Costco’s “culture of trust, respect and reliance upon each other.”
The admission of fault runs contrary to assertive moves by Apple, Amazon, Starbucks, Trader Joe’s, and REI, including accusations of threatening union supporters.
Starbucks came out squarely against labor movements under previous CEO Howard Schultz, who spoke out against what he called "the threat of unionization." The National Labor Relations Board has issued more than 100 complaints encompassing hundreds of accusations of Starbucks’ illegal behavior, including illegally closing 23 stores to suppress organizing activity.
Apple’s managers emphasized that employees could receive fewer promotions and less flexible hours if they unionized, meanwhile circulating a video of its head of retail questioning the wisdom of putting “another organization in the middle of our relationship.”
REI has been accused of exploiting its diversity initiatives by claiming that unionization may “impact our ability to communicate and work directly with our employees,” according to CEO Eric Artz. REI is therefore “leaning on the DEI infrastructure of the company as a substitute for a union,” according to MSNBC.
In a statement, the Teamsters cited improving job safety, securing a stronger voice in the workplace, and obtaining a fairer grievance procedure as factors driving Costco’s Norfolk workers to form a union. Unionized workers, which made up about 5% of Costco’s U.S. workforce last year, ratified their first-ever collective bargaining agreement at the warehouse club in October 2022.
Costco has a reputation for being an employer with high workplace morale and low turnover because it offers above-average wages and benefits and works to promote internally. Many other chains facing unionization pressures are also often lauded for favorable pay and benefits.
A Reddit thread, “Congratulations Norfolk Virginia,” that included Costco’s internal email ran predominantly pro-union, with many respondents skeptical of Costco’s response in the employee email. One comment read, “This screams ‘Please don’t also unionize! Remember how ‘good’ we treat you!’”
However, many labor experts on a LinkedIn thread and several business articles praised the statement. Michael VanDervort from the consultancy Labor Relations Institute told Inc., "I think the letter they sent is a good example of how a double-breasted company (some union, some non-union) should be communicating with their employees. The letter states what happened, shows accountability, and expresses and upholds their values."