In The Year 2525, If Man Is Still Alive, If Woman Can Survive, They May Find Limited Liability Worker Cooperatives

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In 1886, then Senator Leland Stanford introduced a bill in the U.S. Senate to authorize the formation of cooperative worker associations in the District of Columbia.  In an interview with the New York Tribune shortly thereafter, he asserted “I have always been fully persuaded that, through co-operation, labor could become its own employer.”  Co-operation of Labor, Leland Stanford (May 4, 1887) at 2.  Senator Stanford’s vision may soon be realized if two members of of the California Assembly have their legislative way.

AB 2525 (Bonta and Levine) would establish the Limited Liability Worker Cooperative Act.  This bill would authorize a worker cooperative company to be formed for any lawful purpose (with certain exceptions) provided that it is organized and conducts its business primarily for the mutual benefit of its members as patrons of the worker cooperative company.   Members of the worker cooperative company would have equal votes, but the worker-member class would be required to have “ultimate decisionmaking authority” (it’s unclear to me what exactly that means).  The provisions of the California Revised Uniform Limited Liability Act apply to worker cooperative companies, except as otherwise provided in the act.

California already offers the option of forming a cooperative corporation under the Consumer Cooperative Corporation Law, Corp. Code § 12200 et seq.  This bill would provide another option and one that is tailored to workers.  According to Assembly Member Bonta, the bill is being supported by, among others, the Arizmendi Association of Cooperatives, the East Bay Community Law Center, the Sustainable Economies Law Center.  Senator Stanford couldn’t be reached for comment.

 

Topics:  Choice of Entity, Collective Actions

Published In: Business Organization Updates, Labor & Employment Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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