Distinguishing Employee Ownership, Workplace Democracy & Workplace Participation
Employee Ownership, Workplace Participation and Workplace Democracy are Not Synonymous
Employee ownership, workplace participation and workplace democracy are not synonymous although it is advantageous to have all of them in an employee owned company.
In a democratic workplace, employees have the right to vote on all shareholder issues, including election of the Board of Directors. This is standard in worker cooperatives and unusual in ESOPs. Shareholder issues do not include daily shop floor decisions.
In most ESOPs, voting rights are limited to sale or dissolution of the company. However, our firm’s ESOP work has focused on democratic ESOPs, which pass through voting rights to all ESOP participants. These democratic rights are built into the legal structure of the corporation and ESOP, co-op or EOT. For example, MBC Ventures, Carris Reels, Republic Container , Once Again Nut Butter. The selling owners at Carris Reels and Once Again Nut Butter championed and implemented the right for employees to have one-vote-per-person on all shareholder issues implemented them. At MBC Ventures and Republic Container it was the union that championed the same type of voting rights.
Employee participation in workplace decisions can happen at companies that are not employee owned. Employee participation in day to day decisions on the shop floor is created by designing a method of management that builds in worker participation in some types of decisions. Once Again Nut Butter, necessitated by changes accompanying rapid growth, went through a 3-year process to determine who had input, decision-making authority and ratification rights on 79 types of decisions. Zingerman’s employee participation system is part of their overall philosophy which focuses on continuous education leading to increased voice. They operate on a consensus decision making system.
EMPLOYEE OWNERSHIP THAT FITS YOUR NEEDS
We can smoothly transition your privately-owned business to a worker-owned one that meets the seller’s objectives, is socially responsible and includes employee participation. Learn more
TESTIMONIAL
“Our firm would not be the strong, participative, growing ESOP company it is today without Atty. Deborah Groban Olson’s guidance over the past 15 years. When we hired Deb, our company was undergoing major changes and the employees almost lost ownership of the company. Deb helped us work through complex legal matters to make difficult, but necessary decisions. She helped labor and management understand necessary changes and took the heat out of many discussions between them which led to our current cooperative relationship. Deb’s work has been thorough and prompt and she has been available to speak with us whenever needed.” -Mary Landry, Board Chair, MBC Ventures, Inc.
