The Big Money Show explores companies turning against DEI policies while Costco bucks the trend.
The looming threat of 18,000 Costco store employees heading to the picket lines appears less likely, with the Teamsters labor union announcing Saturday that it has reached a tentative agreement for a new contract with the grocery chain.
The negotiations come amid Costco standing firm on its Diversity, Equality, and Inclusion (DEI) policies as most companies turn their backs on the controversial initiative.
“The tentative agreement will be presented to the membership for a vote,” the union, which represents 18,000 Costco workers, wrote in a post on X without providing any details about the agreement with its negotiating committee.
Shoppers outside a Costco store in Bayonne, New Jersey, US, on Saturday, Dec. 9, 2023. Costco Wholesale Corp. is scheduled to release earnings figures on December 14. Photographer: Angus Mordant/Bloomberg via Getty Images (Angus Mordant/Bloomberg via Getty Images / Getty Images)
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Reuters, citing a memo sent to employees this week, reports that Costco is set to increase pay for most of its hourly U.S. store workers to more than $30.
According to the memo, the company will increase hourly pay for its top-of-the-scale employees over the next three years. Pay will rise by $1 to $30.20 in the first year and an extra $1 each in the subsequent two years. The bottom-of-the-scale employees will also get an increase of 50 cents to $20.
Teamsters members at Costco voted overwhelmingly in favor of a strike on Jan. 20 if a new three-year contract agreement could not be reached by midnight last night when the current contract expired.
The strike would affect 50 Costco stores across New York, New Jersey, Virginia and Washington. Costco has 617 stores nationwide.
The workers are looking for better wages, benefits, and work rules amid the company making a record $7.4 billion profit in its most recent fiscal year, which ended on Sept. 1.
The grocery wholesaler, who has long held a pro-worker image, has been locked in a protracted battle with the Teamsters union, which represents 18,000 of Costco’s 219,000 U.S. worker base.
The Teamsters are accusing the grocery club of not sharing its record 2024 profits – which doubled since 2019 – with its workers and have claimed Costco has engaged in “illegal and reckless behavior,” including kicking union reps out of stores, preventing employees from wearing Teamster buttons and changing the locks on union bulletin boards.
Talks broke down in January when Costco refused to reach a card check agreement. Card checks would make it easier for workers to join unions by eliminating secret ballots. About 85% of Costco’s unionized employees voted to authorize a strike.
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Teamsters President Sean O’Brien recently threw down the gauntlet to Costco executives.
“Costco has two choices: respect the workers who made them a success or face a national strike,” O’Brien said in a statement.
“Costco Teamsters deserve an industry-leading contract that reflects the company’s massive profits. If Costco thinks they can exploit our members while raking in billions, we’ll shut them down.
The talks come as Costco doubles down on its DEI policies.
While big companies like Target, McDonald’s and Walmart backed off from their DEI policies, Costco shareholders voted last week to reject an anti-DEI proposal brought by activist shareholder group National Center for Public Policy Research. The measure would have required the wholesale grocery chain to issue a report on the risks associated with their DEI policies.
O’Leary Ventures Chairman Kevin O’Leary declared Costco “nuts” during Wednesday’s “The Big Money Show” for not ditching DEI arguing it is bad for business. (Photo by Tayfun Coskun/Anadolu via Getty Images / Photographer: Ting Shen/Bloomberg via Getty Images / Getty Images)
At its annual meeting recently, more than 98% of shares voted against the proposal.
During his first week in office, President Donald Trump issued an executive order directing the termination of discriminatory practices in the federal government and encouraging termination in the private sector. Following the order, attorneys general from 19 states urged Costco to turn away from its DEI policies.
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O’Leary Ventures Chairman Kevin O’Leary declared Costco “nuts” during Wednesday’s “The Big Money Show” for not ditching DEI arguing it is bad for business.
“They’re nuts if they think I want them fighting the federal government on policy,” O’Leary said. “I don’t care who took that poll when there’s no way you’d get that result today. You don’t fight the attorney general in multiple states, you got to be out of your mind.”
Reuters contributed to this report.
