Memo From Costco’s Former, New CEOs on Union Vote Causes Social Media Stir

A letter attributed to Costco’s top executives has been circulating on social media, addressing employees’ efforts to unionize at a Costco warehouse in Norfolk, Va. Screenshots of the letter, dated Dec. 29 and shared on Reddit and other social media platforms, reveal the reaction of most recent CEO Craig Jelinek and new CEO Ron Vachris to the Dec. 20 vote by more than 100 Costco workers to join Teamsters Local 822 in Virginia.

According to the shared image, Jelinek and Vachris took an unusual tack in their joint response to the action, which passed by a vote of 111-92. “To be honest, we’re disappointed by the result in Norfolk. We’re not disappointed in our employees; we’re disappointed in ourselves as managers and leaders. The fact that that a majority of Norfolk employees feel they wanted or needed a union constitutes a failure on our part,” the letter reads. 

[Read more: “What Makes Costco’s Q1 Earnings So ‘Special’]

The letter posted by others on social media goes on to express that the company’s leaders value relationships with their employees and notes that taking care of workers has not been the result of a union, but instead stems from Costco’s mission statement and its core employee agreements. 

Many social media users praised Jelinek and Vachris for their words, with some calling it “classy” and others noting that it should be used as an example for a business school communications program. 

As of press time, Costco’s representatives did not respond to Progressive Grocer’s request to verify and comment on the letter from Jelinek and Vachris. 

Meanwhile, one Costco employee at the Norfolk location explained his decision shortly after the vote was taken. "This campaign was all about standing together as a group and taking control over our well-being in our workplace," remarked Damion Thomas, a front-end cashier who served on the organizing committee. "We can't wait to be covered under a strong Teamster contract that will give us a real voice and bring real change to the job."

According to the International Brotherhood of Teamsters, Thomas and his co-workers join more than 18,000 Teamsters at Costco nationwide. In October 2022, the Teamsters ratified its first national master agreement for Costco workers, focused on higher wages and pension contributions. 

The shared memo comes at a pivotal time for Costco. On Jan. 1, Jelinek officially stepped down as CEO, succeeded by Vachris, a 40-year Costco veteran. Jelinek is staying on in an advisory capacity until April and remains on the board of directors.

Costco’s annual shareholders meeting is coming up on Jan. 18.

Issaquah, Wash.-based Costco currently operates more than 870 warehouses, including 600 in the United States and Puerto Rico and 108 in Canada. The company is No. 3 on The PG 100, Progressive Grocer’s 2023 list of the top food and consumables retailers in North America. PG has also named Costco one of its Retailers of the Century.