SOURCE: Costco

January 12, 2007 20:21 ET

Statement by Costco Wholesale Corporation CEO, Jim Sinegal, Regarding Class Action Certification

ISSAQUAH, WA -- (MARKET WIRE) -- January 12, 2007 -- Costco Wholesale Corporation ("Costco") (NASDAQ: COST) CEO, Jim Sinegal, today issued the following comments in response to the news that Judge Marilyn Hall Patel, US District Judge in San Francisco, had certified the Ellis vs. Costco case as a class action.

"We were disappointed by Judge Patel's decision to certify this case as a class action. Since we believe in standing up for our principles when we have done nothing wrong, we will continue to defend ourselves against these claims. As Judge Patel's Order makes clear, it would be improper of the Court to delve into the merits of the claim at the class certification stage. We remain optimistic that after a trial on the merits, we will prevail.

"Costco has a well-deserved reputation for fairness to our employees. For more than twenty years, we have been recognized as an enlightened employer that looks out for the best interests of its employees when it comes to pay, benefits, promotions, and fair and open treatment. We believe in the open door policy that encourages all of our employees to seek immediate redress for any grievance. These policies apply to all of our employees without regard to gender, race, ethnicity or any other factor. When it comes to promotions, the only relevant factor is merit demonstrated through years of service to the company. We firmly believe in promoting the most qualified woman or man in every instance. Those who merit a promotion through their diligence, hard work, flexibility, and perseverance, have always done well in our company. This is an essential two-way street for our employees and us. We are dependent for our success and growth on the growth and development of our people. They are our most important assets. It would be self-defeating and nonsensical for us to allow for discrimination in a way that deprives any of our people of an opportunity for advancement, and we do not tolerate any such discrimination. That is why merit is the only measure we have ever used in promotions and why we have more than 250 female General Managers and Assistant General Managers running Costco warehouses in the U.S. today. Our steadfast insistence on merit-based promotions from within the company has also resulted in many women being appointed to warehouse management positions in other countries where we operate, including some countries in Asia and Latin America where such diversity is not common nor legally required.

"Since this case was filed, literally hundreds of current and former female warehouse employees have volunteered to testify in our defense. Many of them have asked for the opportunity to tell their career stories to Costco. They report that they have been treated fairly. It is obvious that there are more men than women in certain warehouse management positions, but statistics cited out of context do not always tell the whole story. We look forward to the opportunity to tell the whole story in the proper forum and at the right time. At the same time, we respect the rights of any current or former employee who disagrees with us, and therefore take this opportunity to reiterate that the company will never retaliate against anyone who participates in the legal process.

"We normally do not comment on pending litigation. We are departing from that rule in this instance because we feel it is important to reiterate our guiding principles to all of our stakeholders."

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