Lawmakers OK bill to provide info on workers’ co-ops when companies are set to shutter
STATE HOUSE – The General Assembly has approved legislation sponsored by House Deputy Majority Whip Christopher R. Blazejewski and Sen. Sandra Cano to notify workers of their opportunity to organize a cooperative and make a bid to buy out their company in the event of a mass layoff or plant closing. The bill, which would take effect Sept. 1, has been transmitted to the governor.
Titled the “Local Ownership Opportunity Act,” the legislation is meant to encourage the preservation of Rhode Island businesses and jobs.
“During the devastating experience of losing a job because a company is closing or contracting, employees may not be thinking about the option of trying to buy out the company cooperatively. They may not even know that possibility exists. My bill is meant to make sure they are informed of their rights so they don’t miss the opportunity to preserve their jobs and their company,” said Representative Blazejewski (D-Dist. 2, Providence). “Ultimately, this notification could help people turn potential job loss into an opportunity to become a part-owner of their company, and keep Rhode Island businesses from shutting down.”
The bill (2019-H 5769aa, 2019-S 0253A) would apply only to companies that are subject to the federal Worker Adjustment and Retraining Notification (WARN) Act, which generally requires employers with 100 or more employees to give employees notice of a plant closing and mass layoff affecting 50 or more employees at a single site.
The legislation would require that, whenever an employer is required to issue a WARN act notification, the state Department of Labor and Training (DLT) would provide the affected employees a written notice that they are legally allowed to furnish a bid to purchase the company, and also provide them information and resources concerning the formation of a workers’ cooperative. In 2017, the General Assembly enacted the statutory vehicle that enables the creation of workers’ cooperatives, which are employee-owned enterprise in which workers share profits and decision-making power.
The bill also directs the DLT to furnish the business owner with information about the formation of workers’ cooperatives. The legislation does not compel, nor prevent, any sale or conversion of any business.
“This bill is about informing employees of their rights and opportunities. Forming a workers’ cooperative is a way to keep a local company in business, while also turning workers into entrepreneurs, giving them a greater voice and a genuine stake in their company’s success. Encouraging workers to consider this option can only have positive effects for our state,” said Senator Cano (D-Dist. 8, Pawtucket).
The House bill is cosponsored by Rep. Michael A. Morin (D-Dist. 49, Woonsocket), Rep. William W. O’Brien (D-Dist. 54, North Providence), Rep. Mario F. Mendez (D-Dist. 13, Johnston, Providence) and Rep. Shelby Maldonado (D-Dist. 56, Central Falls). The Senate bill is cosponsored by Sen. Gayle L. Goldin (D-Dist. 3, Providence), Sen. Maryellen Goodwin (D-Dist. 1, Providence), Sen. Joshua Miller (D-Dist. 28, Cranston, Providence) and Sen. Hanna M. Gallo (D-Dist. 27, Cranston, West Warwick).
For more information, contact:
Meredyth R. Whitty, Publicist
State House Room 20
Providence, RI 02903