Costco's CEO just shared a surprising response to a warehouse unionizing

• Costco's current and former CEOs responded Friday to a Virginia warehouse's recent vote to unionize.
• "We're not disappointed in our employees; we're disappointed in ourselves," they wrote in a memo.
• Roughly 5% of Costco employees were already unionized, with the Teamsters representing 18,000 workers.

Costco's current and former CEOs have weighed in following a Virginia warehouse's recent vote to unionize with the Teamsters.

"We're not disappointed in our employees; we're disappointed in ourselves as managers and leaders," wrote outgoing CEO Craig Jelinek and then-President and now CEO Ron Vachris in a co-signed letter to employees on Friday.

The memo was emailed and posted in warehouse break rooms, multiple employees confirmed to Business Insider. It was also posted to r/Costco on Reddit.

"The fact that a majority of Norfolk employees felt that they wanted or needed a union constitutes a failure on our part," they said.

A week earlier, the Teamsters announced the results of the vote that added 238 of the location's workers to the 120-year-old labor union.

The company did not immediately respond to Business Insider’s request for comment.

"We're not anti-union, but our core value of 'taking care of our employees' has never been the result of any union," Jelinek and Vachris wrote.

The response from Jelinek and Vachris is a stark contrast to Amazon's response to unionization efforts.

"We believe having a direct relationship with the company is best for our employees," the company said in statement after a unionization vote in a Staten Island warehouse in 2022. The company accused the National Labor Relations Board of "undue influence" in the process.

Costco is no stranger to organized labor. More than 18,000 employees are represented by the Teamsters at roughly one-fifth of the company's 600 US locations. The company says a collective bargaining agreement covers 5% of its total workforce.

The Norfolk vote came a little more than a year after the Teamsters ratified a new national agreement with Costco that the union says will bring "significant wage improvements," higher bonuses, and an increase in employer contributions to union members' pensions.

"I agreed with that letter wholeheartedly because that means over 50% of those employees felt like they couldn't go to management with issues, or they went to management and couldn't get their issues resolved in a way they deemed fit," a manager in California told Business Insider.

The manager, who requested anonymity as he is not authorized to speak with the media, said he previously worked at a unionized location, and that he prefers working in non-unionized locations.

"It was disheartening for that location to vote to be in a union, but at the same time, it's a good time for us to reflect and be like, 'Maybe we need to retrain management,'" he added.

A manager in Texas said the company would be wise to boost top-end pay beyond the recent 50-cent annual increases. Costco's current starting wage is $18.50.

Costco still pays some of the highest hourly wages in retail, but competitors like Walmart, Target, and others have been gaining ground amid an especially tight labor market.

"The last two employee agreements haven't made anyone happy," he said, referring to the company's handbook, which is updated each year with compensation details and other benefits.

If you are a Costco worker who wants to share your perspective, please contact Dominick via email or text/call/Signal at 646.768.4750. Responses will be kept confidential, and Business Insider strongly recommends using a personal email and a non-work device when reaching out.

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