• Costco has reached a tentative contract agreement with the Teamsters union, averting a strike that would have impacted operations at over 50 stores.
• The agreement follows weeks of negotiations, with the Teamsters representing 18,000 employees across six states.
• Costco announced significant pay raises for non-union employees just days before the contract deadline, contributing to a favorable negotiating environment.

In a significant turn of events, Costco and the International Brotherhood of Teamsters have reached a tentative agreement on a new contract, successfully averting a strike that was expected to impact over 50 stores across six states. The Teamsters union, representing around 18,000 Costco workers, had threatened to walk out if negotiations did not produce an agreement by the midnight deadline on January 31, 2025.

Although the specific terms of the contract have not been disclosed, the union had demanded improvements in wages and benefits, reflecting Costco's record earnings of $7.36 billion reported in their most recent fiscal year. Teamsters General President Sean O’Brien conveyed the urgency of their demands, stating, "Costco Teamsters deserve an industry-leading contract that reflects the company's massive profits.” Union members had previously shown strong support for a strike, voting overwhelmingly in favor of taking action should negotiations fail.

The agreement comes just days after Costco announced substantial pay raises for its non-union employees, notably raising hourly wages for top-scale workers to $30.20 per hour, with additional raises projected over the next two years. These changes were perceived as a direct response to the union's actions and may have positively influenced negotiations with the Teamsters, as they aimed to establish a profitable and competitive labor environment.

Since the pending strike would have represented a significant disruption, Costco was prepared to keep stores operational using management and non-union staff, as indicated in various communications leading up to the contract deadline. This potential action highlighted the challenging dynamics of labor relations in a sector where unions represent a minority of workers.

As all eyes are now focused on the details of the tentative agreement, Teamsters members must ratify the contract before it can be finalized, keeping the possibility of industrial action alive until formal acceptance.

For additional information, refer to the reports from CBS News and CNN.