Costco Employees Just Voted to Unionize. The Company's Response Is Remarkable

Costco Employees Just Voted to Unionize. The Company’s Response Is Remarkable

By looking inward instead of blaming employees, Costco’s CEO and president demonstrate strong leadership skills as well as emotional intelligence.

Last month, Costco workers in a store in Northern Virginia voted to unionize. While it’s not Coscto’s first unionized location, it certainly isn’t the trend at Costco. Only 5 percent of Costco’s 208,000 employees are union members.

What’s remarkable about this is not that employees voted to unionize — unions have been campaigning heavily and publicly, with Starbucks being the star example of what a union push can accomplish. What’s remarkable is Costco’s response.

Costco CEO Craig Jelinek and president Ron Vachris issued the above letter regarding the union vote, and it’s notable for the approach they took. Instead of defending the company, they addressed the real problem: The people who voted to unionize didn’t feel heard. They wrote, in part:

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 a majority of Norfolk employees felt that they wanted or needed a union constitutes a failure on our part.

What you can learn from this response

“That’s an amazing letter. There’s no blame-shifting, just accountability. It’s refreshing, honestly,” says G. Suluh, managing partner at software consultancy Suluhtions.

Michael VanDervort, from the Labor Relations Institute, agrees with Suluh. “I think the letter they sent is a good example of how a double-breasted company (some union, some non-union) should be communicating with their employees. The letter states what happened, shows accountability, and expresses and upholds their values.”

When your employees tell you something — whether it’s face-to-face, part of an engagement survey, or a vote to unionize — you need to accept accountability. Yes, there are terrible employees, but if multiple employees are telling you there is a problem, you need to act.

Costco goes on to reiterate its values:

Please know that we’re as committed as ever to our employees. If you ever have any doubts or questions about this commitment, please talk with your manager or any member of Costco’s leadership team. Our culture of trust, respect, and reliance upon each other is what makes Costco such a great company.

This is a great way to begin your response to employees telling you there is a problem — which is what unionizing is.

Compare Costco to Starbucks

Starbucks has been in the news a lot for the massive unionization campaign that’s been going on there in the past few years, and unlike Costco, their response has been more negative toward employees.

A court in Colorado just ordered Starbucks to rehire a union leader, Alendrabe “Len” Harris, ruling that Starbucks terminated her unjustly. The victorious employee explained to CBS News that a temporary manager “started firing people for being a minute or two late, started firing people for dress code infractions.” Starbucks terminated Harris for “mishandling the store safe,” which sounds like a good reason to fire someone. But, because the manager jumped directly to termination rather than using progressive discipline, the general practice at Starbucks, the administrative judge ruled in Harris’s favor.

Acting like this looks a lot like retaliation for unionizing. That makes the termination illegal. Even when you have at-will employment, you can’t retaliate against someone for exercising their legal rights. If your employees are talking about their working conditions, including salaries or their desire to unionize, you cannot retaliate. Changing or violating your existing policies in response to complaints can be legally tricky.

But while I criticize Starbucks for their response, it’s interesting to note that only 4 percent of Starbucks stores voted to unionize. Compare that with Costco’s overall 5 percent of employees who are unionized. While this might be comparing apples to oranges, as each Starbucks location has only a few employees, it is interesting to note how important your public response is when it comes to public perception.

To that point, former Democratic presidential candidate Marianne Williamson questioned the true value of Costco’s statement, responding to the above tweet with:

Um, no, that’s not classy; it’s just good PR.

Classy would have been, “We respect the decision made by Costco workers to form a union, and we look forward to a mutually constructive relationship.”

Will Costco carry out its actions as depicted in the CEO and president’s letter? Was the manager who terminated Harris from Starbucks a rogue manager? Both are excellent questions.

When your business is much smaller, carrying things out according to your values is easier. With so many stores — there are more than 9,000 corporate-owned Starbucks and 600 U.S. Costcos — it’s harder to maintain consistent values. But, you have to live what you speak.

Take a lesson from Costco and respond to employees with negative attitudes toward the company by looking inward. Hopefully, Costco will follow through, and your business will as well.

This post originally appeared at inc.com.

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