By Ariana He
August 2022
We are happy to share Cleveland Owns’ summary of a worker ownership organization in Massachusetts called Coalition for Worker Ownership and Power (COWOP). Their effort and experience can point us out a way for future policy campaigns and inter-organizational conversations.
COWOP is a network of Massachusetts cooperative developers, organizers, and policy advocates dedicated to uniting worker co-ops and grassroot organizations in Massachusetts to expand worker ownership. COWOP has created a platform of state-level policies to promote worker cooperatives. They are working with Massachusetts State Legislators to write, introduce, and pass seven policies, summarized in this paper.
Together these policies would provide worker cooperatives with access to capital, technical assistance, training; they would establish a new state-sponsored agency to advance worker ownership; and they would incentivize workers on corporate boards, among other policy goals.
COWOP’s policy website, cooperativema.org, gives a detailed overview of the bills related to worker ownership that may benefit cooperatives. Of the seven listed acts, there are five confirmed and two currently under consideration.
Policy Summary Table
| Policy | Description | Funding | Bill/Act |
|---|---|---|---|
| Grant and Loan Gaurantees | State-issued capital pool to fund frants and loan for newly established co-ops | $500,00 | n/a |
| Advisory Board for MassCEO | The creation of the Advisory Board for Massachusetts Center for Employee Ownership (MassCEO)for employee ownership and collaborative outreach | TBD | Bill H.511 Bill S.261 |
| Technical Assistance | Funding increase for small nonprofit providers of coop development technical assistance | $250,000 | N/A |
| Employees on Corporate Boards | Fair worker representation on corporate board: 40% of democratically elected employees on the board | TBD | Bill S.1223 |
| Training | Worker ownership training opportunities expansion to both employed and unemployed | TBD | Bill H.2059 |
| Right of First Refusal | The right of first refusal for business owners when selling the business or transferring ownership | TBD | Bill H.2021 |
| Study Commission | Establishment of a study commission to understand the feasibility of an Inclusive Ownership Fund in MA | TBD | N/A |
Policy Descriptions
Grant and Loans Guarantees - The grant and loans guarantee is a capital pool provided by Senator Julian Cyr in the FY 23 budget. The funding includes $500,000 for local entrepreneurs. The funding will guarantee equal access to all, especially assuring people of color and newly established co-ops. The funding is included in the Round 2 of federal covid relief (APRA) supplemental budget plan of 2021.
Advisory Board for MassCEO - The Advisory Board for Massachusetts Center for Employee Ownership (MassCEO) is co-sponsored by Rep. Paul Mark and Rep. Carmine Gentile in Bill H.511. It is an act enabling the Massachusetts Center for Employee Ownership, which establishes resources to enhance employee ownership and collaborative outreach. The director of the MassCEO has the responsibility of financial management, rules regulation, and report submission. The statewide Advisory Board On Employee Ownership consists of 19 stakeholders and relevant state agencies, including the director of MassCEO, with specific responsibilities and terms of office. Seats are chosen democratically by COWOP members to represent coalition interests. Further, Sen. Julian Cyr added Bill S.261 to address issues related to the election of the board, members composition, and expected responsibilities, requiring the advisory board to provide advice on matters related to employee ownership policy and promote worker’s involvement and ownership in the workplace.
Technical Assistance - COWOP promoted technical assistance for cooperatives as an amendment to the ARPA state covid relief supplemental budget in Spring, 2022. This budget allocation is sponsored by Senator Julian Cyr, and it asks for a significant increase in funding for non-profit organizations which provide technical assistance to corporations. The funding will be designated to assistance for local entrepreneurs, especially people of color, and to facilitate transitioning traditional businesses to democratically run worker-owned cooperatives..
Employees on Corporate Boards - COWOP supports the act S.1223 to promote fair worker representation on corporate boards. This bill is sponsored by Sen. Jason Lewis and Sen. James B. Eldridge. It requires large companies with over $100 million in annual revenue to ensure that a minimum of 40% of its board of directors be democratically elected by the employees of the corporation. The election requires the elected workers on the board to have the same responsibilities, rights, and power as directors elected by the stockholders. This practice is called co-determination, and could greatly advance corporate accountability and equity while promoting worker morale.
Training - COWOP filed the act H.2059 to expand worker ownership training opportunities in 2021, which is sponsored by Rep. Paul Mark and Rep. Erika Uyterhoeven. This bill adds on the Workforce Investment Opportunity Act which offers workforce training programs, and it expands training in business ownership, development and management skills to eligible unemployed workers, rather than being limited to only employed workers. Meanwhile, independent contractors and owners of Limited Liability Companies will be permitted to be eligible for training funds under the On-The-Job (OTJ) program. This helps to meet an unmet need expressed consistently by new worker-owners, effectively empowering them to secure ownership.
Right of First Refusal - The right of first refusal is proposed in the bill H.2021 to add amendments to the current law on job creation through employee ownership, and it is sponsored by Rep. Paul Mark. In the event that business owners move to sell the business or transfer ownership, the act requires the business corporation to notify employees in writing within seven days about the eligibility of purchasing or bidding the corporation through the employee stock ownership program. After the notification, the corporation shall have the right of first refusal in bidding to purchase the corporation through a cooperative or employee stock ownership program.
Study Commission - Sen. Adam Gomez plans to sponsor an act to establish a Study Commission on an Inclusive Ownership Fund and Seats on Corporate Boards, which is still to be decided. This bill sets up a commission to study the feasibility of an Inclusive Ownership Fund in MA funded through stock transfers from large corporations, and mandating workers to have seats on the boards of large corporations based in MA or those winning large public contracts.
References
“Amendment H.3771 192nd (Current) - Malegislature.gov.” Accessed August 16, 2022. https://malegislature.gov/Bills/192/H3771.
“Bill S.1223 192nd (Current) - Malegislature.gov.” Accessed August 16, 2022. https://malegislature.gov/Bills/192/S1223.
COWOP. Accessed August 15, 2022. https://cooperativema.org/.
“Massachusetts Legislature Homepage.” The 192nd General Court of the Commonwealth of Massachusetts. Accessed August 15, 2022. https://malegislature.gov/.