Costco finds itself at the center of two heated controversies: a dispute over its diversity, equity, and inclusion (DEI) policies and a looming strike by 18,000 Teamsters. The company’s pro-worker image is now in question as a contract deadline approaches.
Key Facts:
- 18,000 Costco store employees, represented by the Teamsters, could strike if no contract deal is reached by Friday.
- The union represents 18,000 of Costco’s 219,000 U.S. workers.
- The Teamsters accuse Costco of not sharing its record $7.4 billion in profits fairly.
- Attorneys general from 19 states called on Costco to abandon what they call unlawful discrimination in its DEI program.
- A strike would affect 50 stores in New York, New Jersey, Virginia, and Washington.
The Rest of The Story:
Costco’s long-standing image as a worker-friendly retailer is being tested as its largest labor clash in recent memory unfolds.
The Teamsters claim that Costco has engaged in “illegal and reckless behavior,” which they say includes removing union reps from stores and altering locks on union bulletin boards.
As Friday’s contract deadline looms, the union says 85 percent of its members at Costco voted to authorize a strike.
They want improved wages, benefits, and work rules that match Costco’s hefty profits.
Teamsters President Sean O’Brien warned in a statement, “Costco has two choices: respect the workers who made them a success or face a national strike.”
Meanwhile, 19 attorneys general have urged Costco to drop DEI mandates they believe amount to discrimination.
The company’s board, however, recently rejected an anti-DEI measure brought forward by activist investors, suggesting Costco is standing firm on its policies.
Commentary:
Costco is now under pressure for publicly doubling down on a set of “woke” DEI initiatives at a time when other big retailers, such as Walmart and Target, have moved away from similar programs.
By taking this stance, Costco risks alienating customers who see DEI as more divisive than unifying. Adding to that concern is the potential strike.
Costco has built a loyal following for its bulk savings and strong employee satisfaction. Yet if customers perceive the company as out of touch with both worker needs and broader public sentiment, it could undermine Costco’s reputation and ultimately its bottom line.
The Bottom Line:
Costco is juggling both a labor dispute and stark criticism over its DEI policies.
How it responds to these pressures may shape the future of its relationship with employees and its large base of devoted shoppers.
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