Costco seeks to overturn arbitration award in Teamsters dispute

Ratifying a contract did not end Costco’s fight with Teamsters Local 174. On June 15, Costco filed in federal court in Washington to vacate an arbitration award in Costco Wholesale v. Teamsters Local 174, pushing a neutral ruling back into dispute and keeping a contract fight alive after the deal was signed.

The case, No. 2:2026cv02096, is in the U.S. District Court for the Western District of Washington and lists the cause of action under 9 U.S.C. § 10, a petition to vacate an arbitration award. The public docket shows Costco filed a petition, brief and declaration with multiple exhibits that day. It does not spell out every detail of the underlying dispute, which is exactly why the filing matters to workers: a vacatur fight can stretch out the timeline and leave grievance language hanging while lawyers argue over what the arbitrator meant.

That is not an abstract problem in Costco’s labor world. In April 2025, more than 150 Costco fleet drivers and MDO logistics workers represented by Local 174 ratified a three-year agreement that the union said locked in wage increases, a defined-benefit pension, stronger seniority rights, just-cause discipline and a grievance procedure. The Teamsters also said the Sumner, Washington drivers were the first-ever Costco distribution center workers to unionize with the Teamsters.

But the enforcement fights did not stop there. In June 2025, Local 174 said Costco had not paid retroactive wages owed back to September 1, 2024, and the union filed multiple complaints with the Washington State Department of Labor and Industries. In January 2026, Local 174 reported an arbitration victory for driver Chuck Thacker, saying he was reinstated with back pay and benefits in the tens of thousands after a demotion at the end of 2024. For workers on the floor, those cases are the difference between contract language that exists on paper and contract language that actually protects a shift, a paycheck or a job.

Costco’s scale makes the stakes larger. For fiscal 2025, the company reported net sales of $269.9 billion and 891 warehouses worldwide, including a labor footprint that reaches far beyond Sumner. Membership-fee revenue rose 10%, and renewal rates reached 92.3% in the U.S. and Canada and 89.8% worldwide. That kind of scale gives every dispute more weight, because a fight over one arbitration award can signal how hard the company is willing to push when a contract outcome goes against it.

For Costco workers, the filing is a reminder that ratification is not the finish line. The real test comes when a grievance is filed, an arbitrator rules and the company decides whether to live with that decision or challenge it in court.