Regunberg introduces legislation to allow workers a chance to buy closing businesses
STATE HOUSE –Rep. Aaron Regunberg (D-Dist. 4, Providence) has introduced legislation that would give workers the power to enter a bid to purchase a closing business and turn it into a worker-owned cooperative. The bill comes in response to recent closures of locally-owned businesses in Rhode Island that have left numerous workers out in the cold.
“There’s nothing more heartbreaking than seeing a business close or get sold and leave workers with little warning and no job,” Representative Regunberg said. “If there’s an opportunity for Rhode Islanders to save their jobs and keep local businesses from shutting down, we should do everything we can to give folks that chance. This legislation creates a process to give Rhode Islanders that chance.”
Representative Regunberg’s bill, the Local Ownership Opportunity Act (2018-H 7799), would require employers to notify their employees in the event of an upcoming closure and let them know about the ability to submit a bid to purchase the business themselves and run it as a workers’ co-op. The bill would then give workers 30 days to vote on whether to submit a bid and allow for a formal bid process to proceed. If the company in question accepts the bid, then the business would convert into a worker-run co-op.
Through this bill, Representative Regunberg hopes to limit cases of workers being let go after large businesses suddenly close down, like the loss of retailer Benny’s in 2017. In doing so, Representative Regunberg’s Local Ownership Opportunity Act aims to not only spur economic development in Rhode Island, but also ensure that workers aren’t left behind in our state’s economy.
Rhode Island has many businesses with soon-to-be retiring owners and many local jobs will be lost if succession plans are not established. Combined with the threat of shifting conditions in our economy, as well as the typical fluctuations in business cycles, many local businesses are not well positioned for long-term success. Data points to better survival performance of worker co-ops. For example, A 2008 study in Quebec Canada showed that co-ops had a five-year survival rate of 62 percent and 10-year survival rate of 44 percent. This compared to 35 percent for five years and 20 percent for 10 years for conventional businesses. This solution-driven bill creates a framework for workers to purchase a local business from the existing owners and operate the business as a worker cooperative, as defined by legislation passed last year.
For more information, contact:
Meredyth R. Whitty, Publicist
State House Room 20
Providence, RI 02903