Costco Teamsters Ratify Industry-Leading Contract
For Ronnie Pimentel, being a Teamster at Costco is the best of both worlds.
“We have the highest standards in the industry because both sides, the company and the union, are in agreement about treating employees right,” he said.
Pimentel, a 15-year Costco worker in Chino Hills, Calif., joined his 15,000 co-workers in February to ratify a strong three-year contract with the company.
“It feels good to be a Teamster and a Costco worker.”
Already the highest paid retail workers in the country, Costco employees voted by a 77-percent margin in favor of the new agreement that includes a 9-percent wage increase over the life of the agreement.
The new contract covers thousands of workers at 55 stores throughout California, New York, Maryland and Virginia. It ensures stronger job protections and strengthened grievance procedures.
“Costco Teamsters are the backbone of this retailer’s strength and success,” said Teamsters International Vice President Rome Aloise, who led negotiations with the company. “This contract acknowledges the high quality of work that Teamsters bring to this company. It’s a big win for the workers. We are proud of the members and the bargaining committee for negotiating and ratifying another industry-leading contract.”
The strength of the contract is especially remarkable given the weaker economic climate that is typically seen as an opportunity by retailers to squeeze their workers. But Costco’s strength as a company is a result of the quality of work that Teamsters bring to the industry.
“Costco employees have won a solid contract that retains and improves the high industry standards they enjoy thanks to Teamster representation at the bargaining table,” said Teamsters General President Jim Hoffa. “The workers know that Costco’s success in the industry wouldn’t be what it is without its highly skilled union work force. This contract ensures the employees will continue to share in the company’s success.”
Bargaining for the Best
Annual pay increases over the next three years will bring the hourly rate for clerks to $22.87, more than twice the average hourly pay for workers at Costco competitors like Sam’s Club. The new contract also guarantees biannual bonuses of $3,750 to $4,000 for clerks. Other strengths of the agreement include stronger grievance and disciplinary protections. Costco employees will also enjoy improved seniority rights, protecting workers within their job classification and promising increased pay for transfers to higher-ranking positions.
The new contract is the culmination of four months of negotiations. Proposals by the union were crafted by the negotiating committee based on bargaining surveys and direct member input at meetings. Rank-and-file involvement helped the committee focus on bargaining priorities.
“I’ve been with the company for a long time and I wanted to make sure that we got a contract that treats everyone fairly,” said Kevin Miller, a 26-year Costco employee in Glen Burnie, Md. and member of Local 311 who was active in negotiating committee meetings.
“The proposals that were ratified in the new agreement are favorable for us. Costco is definitely a leader in employee services and the Teamsters have always been a good force holding the company accountable and keeping them fair with their workers,” Miller said.
Major goals for the new contract, such as maintaining bonuses, raising wages and minimizing differences between contracts on the East and West Coast, were met. Additionally, a number of company proposals that would have made it easier to terminate workers for disciplinary reasons and undermine grievance handling were knocked down thanks to the skilled negotiating team led by Aloise.
In fact, the new agreement strengthens grievance procedures with more frequent and regular panels to handle cases.
“This will make the grievance process a lot more efficient and expedited,” said Dan Hernandez, who works at a Costco store in Azusa, Calif. As a member of Local 166 and a 20-year shop steward who’s been working at Costco for 29 years, Hernandez was heavily involved in negotiations and called the contract another big step forward for Costco Teamsters.
“We feel really good about the new contract. We know it wouldn’t have been possible without the skilled leadership of business agents like Ralph Ferri at my local, and Rome Aloise, who’s been fighting for us for a long time and knows the contract like the back of his hand,” he said.
Hernandez is especially excited about the new contract since he will be helping to administer it as a business agent himself, replacing Ferri, who is retiring soon.
“Costco is a good employer and I am going to miss working here. But I’ll be working for a great local union to enforce a great contract for Costco employees.”
Soaring Above the Rest
The new Teamster contract at Costco puts the company miles ahead of other retailers in terms of wages, job protection and other benefits.
Costco workers’ average pay is substantially higher than its rival, Sam’s Club, which is owned by Wal-Mart. Strong wages and benefits enjoyed by Costco’s Teamster workforce result in lower turnover among employees which in turn secures a high-skilled workforce.
This explains why Costco has been able to survive and thrive in an industry that is more known for low wages and poor to nonexistent benefits. Where other retailers view labor as an added cost to doing business, 20 years of Teamster representation at Costco has made the company realize that workers who are well paid and treated fairly are invaluable assets to the functioning of a strong business.
These high standards for workers throughout Costco’s chain are a direct result of the union power that is at the heart of being a Teamster. “The Teamsters have been and will continue to be a driving force in the success of this company,” Aloise said. “Costco is a model employer because it has model employees and a powerful union that represents them. Costco Teamster members and everyone who was involved in this effort should be proud of their work. Together we won the best possible contract for workers who deserve nothing less.”
Walmart vs. Workers
To look at the working conditions at Wal-Mart versus a Teamster-represented rival like Costco is to hear a tale of two retailers. Since its inception 50 years ago, Wal-Mart has become the world’s largest company, dominating and redefining industries around the world.
It’s no secret that Wal-Mart’s low-cost empire is built on poverty-level wages. The retail giant’s low wages and virtually nonexistent benefits force many of its employees to rely on public assistance. Wal-Mart’s sprawling distribution networks and vast supply chains have helped it globalize what’s known as the “Wal-Mart economy.” It’s an economy sustained by suppliers, contractors and Wal-Mart’s own competitors, all of whom follow the mega-retailer’s exploitative cost-cutting model. It’s also an economy that would not exist if not for its massive workforce and Wal-Mart’s signature weapon: union busting.
Since the 1970s, Wal-Mart has successfully defeated every unionization effort among its workers. Throughout the 1990s and 2000s, Wal-Mart crushed organizing efforts. When meat cutters in Texas organized in 2000, Wal-Mart’s response was to shut down its meat counters at 180 stores and replace them with prepackaged cuts. The company’s notorious anti-union machinery relies on worker intimidation, illegal firings, court injunctions and elaborate anti-union inoculation. In the meantime, Wal-Mart has clashed with community organizations, environmental advocates, and discrimination and wage-theft class-action suits.
On top of all the violations it routinely commits against the rights of its own workers, Wal-Mart and its family heirs have invested millions in the right-wing anti-worker legislative agenda. Until recently, the company had been active in anti-worker groups like ALEC (American Legislative Exchange Council) and, through the Walton Family Foundation, it promotes the corporate education agenda against teachers unions.
Wal-Mart has long been the vanguard of union busting in the workplace. But it recently has also become the target of a new movement of workplace organizing and protest. A wave of unprecedented strikes began last year, hitting suppliers, warehouses and Wal-Mart stores. Nonunion warehouse workers in Illinois and California engaged in walkouts and civil disobedience last fall, leading to a historic victory with workers winning their principal demands.
Store employees at 30 locations in 12 states followed the warehouse workers’ example, striking in October without formal union protection. These courageous actions culminated in what organizers called the “Black Friday Rebellion.” In 46 states across the country, hundreds of workers and thousands of supporters staged walkouts and rallies to demand living wages, better conditions and respect for workers. This new movement is experimenting with new ways of organizing to outflank Wal-Mart’s union-busting expertise; activists and workers are using aggressive strikes, direct actions and industry-wide mobilizing to force Wal-Mart to change its abusive practices.
When it comes to keeping workers out of the middle class, Wal-Mart is the standard-bearer for corporate America. But as workers understand the power of a union contract and their ability to organize in the face of Wal-Mart’s scare tactics, they are becoming more eager to join their brothers and sisters in the labor movement. While that remains a daunting, uphill struggle, their success would be a game-changing event for organized labor and for workers everywhere.