Keywords

1 Introduction

Governance in worker cooperatives can look and feel like that within any other co-op, but it may also be dramatically different. The worker-members may elect a board of directors and that board then hires and supervises a general manager. Worker co-ops using a traditional management structure might be more focused on transactional relationships with the workers (i.e. a material focus on wages and benefits). However, many worker co-ops have some level of engagement that tends to provide a voice for workers in operations and the board/workforce may engage in deeper policy work that provides direction to management on how to run the cooperative. In a worker cooperative, directors generally are also rank-and-file members, so if there is dissatisfaction with policies or management actions, it may often be a discussion on the shop floor.

In a traditional business, and even in consumer and producer cooperatives, the role of management generally exists to manage employees and resources to meet the mission, strategic goals, and policies created by the organization’s governance body. In a worker cooperative, management still needs to effectively use resources, but the mission (effectively the needs of the membership) tends to be internally focused: create better pay, benefits, and humane working conditions. For example, the mission statement of Union Cab of Madison Co-operative (UCC) essentially sums up a common goal of any worker co-op: “to create jobs at a living wage or better in a safe, humane, and democratic environment” (UCC, 2014).Footnote 1 Additionally, the World Declaration on Worker Co-operatives also addresses the social mission of worker cooperation: “They have the objective of creating and maintaining sustainable jobs and generating wealth, in order to improve the quality of life of the worker-members, dignify human work, allow workers’ democratic self-management and promote community and local development” (CICOPA, 2005). Worker cooperatives generally operate in a way that respects the individual member and treats them as a person, not another resource to utilize towards generating profit or surplus. Even if the cooperative uses traditional structures for the economic sector that the co-op operates within, the lived experience of workers in these cooperatives, in which at least a substantial proportion of the employees are also the owners who democratically control the enterprise, creates situations in which the politics of the workplace can be much more dynamic and can require different models of governance than might be used in traditional organizations, or even in other types of cooperatives.

The generally accepted legal form of a cooperative firm may not always be available to workers. Worker cooperatives thus operate through a variety of legal structures by incorporating the values and principles of cooperatives throughout the organizations, and particularly within the internal constitutions and bylaws. The International Organization of Industrial and Service Cooperatives (CICOPA) defines a worker co-op within the Statement on the Cooperative Identity, but also as an economic organization owned and democratically controlled by its workers on a one-member, one-vote basis, and in which the majority of the workers are members and a majority of the members are workers (CICOPA, 2005).

In the United States, the US Federation of Worker Cooperatives (USFWC) and Democracy at Work Institute remain silent on the percentage of worker-member ownership that constitutes a worker co-op; but they do require that “all workers who are willing to accept the responsibilities of membership and who meet member eligibility criteria are eligible to become worker-members” (DAWI, 2015).Footnote 2 The actual legal format may differ widely and may even preclude the organization from using “cooperative” in the name of the business. In the United States, worker co-ops may organize under statutes as a limited liability company or as a S-Corporation (IRS, 2022),Footnote 3 or even, in some states, as a mutual organization or not-for profit (Nonprofit Miscellaneous and Mutual Corporations Act, 2022).

The manner in which worker co-ops democratically govern themselves runs along a continuum: from collectives with a flat structure, no formally assigned roles and using consensus, to traditional hierarchies with representative democracy and parliamentary voting schemes. Three basic decision-making paradigms hence provide the parameters for this discussion: traditional hierarchy, sociocracy, and (flat) collectives. In addition, the pairing of labour unions with worker cooperatives has grown in popularity in the United States, United Kingdom, and Canada. The “union cooperative” (or, more accurately for the purposes of this chapter, the “unionized worker cooperative”) adds another organizational layer that shares membership (i.e. workers who are members of both the union and the co-op) and navigates the power relationship within the cooperative (primarily between “shop floor” or operative workers/members and the elected/appointed management). The local union also connects the cooperative to the larger labour movement at the regional, national, and international levels. Essentially, labour unions offer another layer of governance that provides direction to management while also acting as a check on the power of the board of directors. Collective bargaining agreements may replace many of the policies that non-union worker co-op boards generally oversee unilaterally. The union cooperative model creates a humanistic focus even within traditional hierarchal management models by requiring managers to navigate between board and union oversight.

The types of governance structures and processes can change over time and there are many examples of co-ops using hybrid models. Co-ops may use majority rule voting at annual general meetings (AGMs) but use consensus or a modified consensus method at committee and board meetings. In Canada and the United States, the state or province enacts corporate law, and in some regions the voting might be mandated as simple majority or supermajority, which may make alternative decision-making procedures difficult if they fall outside of those parameters (for example, if a co-op fails to achieve consensus for a proposal which a majority of members support, the majority could argue that their legal rights as members have been ignored).

This chapter will examine representative case studies of the three basic types of organizational structure in worker co-ops in the United States: hierarchy (Cooperative Home Care Associates), collective (Burial Grounds Collective), and sociocracy (Unicorn Grocery). Following this overview will be a discussion of how worker cooperatives develop democratic communities beyond voting, help members engage in decisions and resolve conflicts (e.g. Union Cab and Rainbow Grocery), and create models for building worker power within the organization and the greater community. Finally, the chapter considers the challenge of growth or “scaling up” while attempting to maintain a vibrant democratic and human workplace. The worker co-op model offers a diverse array of governance and management strategies, including unionization and consensus-based decision-making, to achieve the goal of creating dignified workspaces within the overall structure of the cooperative identity (ICA, 1995).

2 Structures of Decision-Making and Voice

In their longitudinal studies, What Workers Want, Richard Freeman and Joel Rogers (2006) determined that workers want to be engaged with their workplace; they want to be more than a pair of hands turning a lever or flipping a switch. Workers want to participate and, in many cases, the ability to participate can be more important to them than pay and benefits. The desire for agency in the workplace fits with A. O. Hirschman’s theory on Exit, Voice and Loyalty in which Hirschman (1970) argues that people who are denied a voice in their organization will choose to leave. Recent studies also acknowledge that a “Voice Gap” correlates with a new interest in unionism in the United States (Kochan et al., 2019). The expectation of “voice” in a worker-owned business plays a key role. Simply voting at the annual general membership meeting may not feel like a sufficient expression of voice in a worker-owned enterprise. Being able to express opinions on work design, managerial and board decisions, and conflict lies within the cooperative ethics of openness and honesty. Relegating a worker’s voice through governance models designed for investor-owned firms can lead to frustration, disappointment, and exit.

Worker co-ops tend to be values-driven businesses based upon the cooperative identity, and examples of the type of organizations that Freeman and Rogers (2006) show are desirable. Research further shows that worker-owned and controlled organizations tend to align around the values and principles of cooperation, which can be seen as an expression of human dignity (Stocki & Hough, 2016). The type of management can also help promote voice or exit within the organization, with those management styles aligned with the cooperative identity also promoting greater voice and loyalty within the organization (McNamara, 2019). In the lived experience of the cooperative workplace, however, the strict adherence to any one governance or decision-making model is limited by the everyday needs faced by the business and the needs of the workers. The result is an unspoken quality in that worker co-ops are pragmatic and adaptable. The academic discussion around governance and operations gives way to “getting the job done”. As a result, none of the examples provided in what follows will be a textbook model of the type of governance, but rather an application of how larger worker-controlled workplaces use these tools as a starting place to engage in democracy, solidarity, and voice.

2.1 Hierarchy—Cooperative Home Care Associates

The traditional model of hierarchy generally follows the model of investor-owned organizations in which the shareholders select a board of directors that then hires and oversees a Chief Executive Officer (CEO) or General Manager (GM). In many cases, most of the operational control of the business transfers to the CEO who acts within the parameters set by the board of directors. The unique aspect of the worker co-op arises from the member-owners also being the employees. This creates a circular model in which everyone in the organization answers to someone else (worker-members elect the board-representative workers; the board hires the manager; and the manager supervises the worker-members and non-member employees). In many cases, especially for small cooperatives, the workers who directly report to the GM may also supervise the GM. This creates a distributed balance of power in an organizational model that would normally place most of the power in the hands of the CEO (who in investor-owned firms may also be a majority shareholder).

In larger cooperatives, however, the power of a single vote may be diluted, and political factions may compromise the overall effectiveness of board and membership oversight. While board oversight may dull some of the formal power of a CEO or general manager, the position still concentrates significant informal and formal power on an individual within the organization; so traditional governance models used in cooperatives may not be sufficient to exercise membership control of the organization.

An antidote to managerial power in a worker co-op can occur through a flattening of the hierarchy, as will be discussed later, or by adding another collective voice into the governance model of the organization through a labour union. The union cooperative model uses two membership organizations to create responsive management and governance within the co-op, while also connecting the worker cooperative to the larger labour movement. The union co-op model traces its history to the earliest days of the labour movement in the United States, with the National Labor Union and the Knights of Labor using cooperatives as a means to navigate the changing nature of work and employment during the first industrial revolution in the United States (Jacques, 1996; Leikin, 2005). However, internal, and external forces limited the ability of the Knights of Labor in the drive to challenge the financiers and industrialists during the Gilded Age of the late nineteenth century. Internally, the Knights failed to invest in management education for their member cooperatives, and, externally, the large extent of collusion between railroad and manufacturing barons limited the ability of these co-ops to reach their market.

Ultimately, as the industrialists claimed supremacy in the new economy, trade unionism and industrial unionism came to dominate the labour movement, with co-ops playing second fiddle at best. In the UK, the cooperative movement, led by Fabian Society leaders Beatrice and Sydney Webb, focused on consumer co-ops, as they viewed worker cooperation through a hostile lens, as unstable and representative of a conflict of interest; however, they also supported the right of workers to organize (Mathews, 1999). The movements of labourism and cooperativism combined as partners politically in the form of the Labour Party and the Co-operative Party in 1919 (Rosen, 2007). In contemporary society, Móndragon Cooperative federation signed a memo of understanding with the United Steelworkers (USW) in 2009, and the Union passed Resolution 27 in 2011 to support worker cooperatives (USW, 2011). This specific model sought to replace the “Social Council” of Mondragon’s primary cooperatives with the labour union (Witherell, 2013). However, there is not only one model of the union cooperative; indeed, the largest unionized worker co-op in the United States partnered with the Service Employees International Union (SEIU) a decade before the Móndragon-USW model came into being.

A labour union allied with a worker cooperative helps the members of the co-op to engage with and learn from the wider labour movement. Labour unions help worker co-ops to engage with their community and economy in a way that furthers their cooperative difference. In a hierarchal management structure, the labour union can also provide a further check on the formal power of the CEO or GM and keep the board of directors focused on its mission, the needs of the membership, and the needs of the larger community. Worker co-ops can also assist labour unions. Organizationally, labour unions also need to combat isomorphic pressure to conform to the very institutions that they organize against. Worker co-ops can help to create stronger foundations of equity, equality, and democracy within labour unions.

Cooperative Home Care Associates (CHCA), based in the Bronx, New York, with approximately 2000 members, operates as the second largest worker cooperative in the United States.Footnote 4 CHCA was formed in the 1980s to take advantage of new Medical Assistance (Medicaid) programs that provide in-home care. CHCA provides home care services to residents of the Bronx whose income qualifies them for Medicaid,Footnote 5 and the staff mostly consists of residents of the Bronx. The membership reflects the Bronx, NY community, with the caregivers and administrative staff consisting of primarily Latina and Black women. Home care in the United States remains an industry based on in-work poverty, with most home care agencies providing only minimum wage, no benefits, and part-time work. CHCA sought to change this by providing a means for caregivers to have agency through cooperation. However, the funding model limited the ability to significantly raise wages or add other benefits, as the billing rates were based on the budget of the State of New York. In 2001, the Service Employee International Union, which focuses on the healthcare industry, began negotiating with CHCA. SEIU wanted CHCA to join their union as part of their effort to support home care and healthcare workers (Lurie, 2021).

2.2 Collective—Burial Grounds

The ability of workers to use their voice provides a fundamental difference in how worker cooperatives embrace governance. In addition to being able to serve on and elect the board of directors, many worker co-ops have accountability models focused on due process and engagement. Further, often the development of policy proposals and business strategy engages a call-and-response process to ensure that the membership agrees with the leadership on the future of the cooperative.

Collectives subscribe to flat governance structures. The collectivist/flat model sits at the other end of the continuum from hierarchy, in terms of the length of the “chain of command”. In this model, all workers are members of the collective with an equal voice. Collectives generally do not delegate power or decision-making to a board of directors or a management class: most decisions are made by the entire collective. The collective can create sub-groups, but usually, these are for specific tasks. Generally speaking, most worker cooperatives that use a collective model are quite small with under 30 worker-members; however, some larger ones exist such as the Cecocesola worker co-op in Venezuela with over 600 worker-members (see Soetens et al., Chapter 12 in this volume; Cecosesola, 2022). Using the collective process also means that everyone participates in almost all aspects of the organization, including holding each other accountable, setting working conditions, and determining pay and benefits.

Decision-making in collectivist worker co-ops tends to focus on consensus. While there are many versions of consensus, one format involves the group co-creating a proposal and then testing for consensus.Footnote 6 Members can choose to “step aside” if they don’t fully endorse the proposal but wish to let it proceed (i.e. give consent rather than back strict consensus), or they may block its passage if they believe that the proposal goes against the co-op’s mission or other criteria. One person can block consensus; however, different versions of the consensus process may require more than one person, or some specific reasoning to halt or reject a proposal. This is often termed “modified consensus” or “consensus -1”. In any event, the collective model empowers individuals to use their voice and work together by working towards consensus.

Burial Grounds Collective, a worker cooperative, offers a standard model of the consensus/collective format. Burial Grounds operates a signal café in Olympia, Washington in the Pacific Northwest of the United States. The café converted to worker ownership in January 2020, moved to a new location, and reopened for operations in March 2020, about a week before the state government mandated that businesses close due to the Covid-19 pandemic. The collective survived through the pandemic by pivoting to home delivery (marketing as “consumer supported caffeine”), accessing government support, and meeting to address the constantly changing business environment with the goal of reopening in a way that focused on safety for collective members and their community.Footnote 7 The collective consists of eight members. Decisions on governance issues and operational issues are made by the collective using consensus as the decision-making format. To operate within the community, the collective may provide a member of the collective with specific signing powers (such as signing checks), but only after a discussion among the collective that establishes limits to these powers. Whether the decisions have a governance aspect (strategic planning) or operational (staffing and pay), the collective makes the decision together.

2.3 Sociocracy—Unicorn Grocery

Sociocracy is a system of dynamic consent-based governance and decision-making (Christian, 2013; McNamara, 2017; SoFA Co-op Circle, 2018). There are many variations of sociocracy used throughout the world; however, the most common practice is the “sociocracy circle method” (Rau & Koch-Gonzalez, 2018). In this system, an organization creates a hierarchy of work (not of decision-making power) through the establishment of circles. Each circle has a specific aim connected to the overall vision and mission of the organization. The circles follow the pattern with the “parent” circle creating the “child” circle and appointing a leader. The circle leader coordinates the work of the circle and reports down from the parent circle. The child circle elects a delegate to serve on the parent circle whose role is to report up to the parent circle. In this double-linked, bi-directional communication, the system eventually represents a web of business activity (Rau, 2017).

Sociocracy relies on consent for decision-making. The consent process uses picture-forming exercises in which each participant offers input on the nature of the issue at hand. Further, during picture forming, gauging reaction, or discussion, the process of consent-based decision-making evolves in “rounds” or the “round-robin” method to ensure that each member of the circle has the opportunity to present their views, without allowing any members to dominate a speakers list. A question is asked whether the proposal is “safe enough to try, and good enough for now”, as opposed to asking if there are “blocks” or stand-asides. In sociocracy vernacular, members are asked if they “don’t object” as opposed to if they “agree” (Rau & Koch-Gonzalez, 2018).

Unicorn Grocery Co-operative (UGC) opened in 1996 after two years of hard work to create a worker-owned and managed cooperative in Manchester, ENG (UGC, 2021). Unicorn began operations as a collective, making decisions through consensus. As with Rainbow Grocery Cooperative (see below) in San Francisco, California, they created a board of directors to meet the legal requirements in the United Kingdom. Unicorn, however, chose to appoint all members to the board of directors. UGC has 70 director-members as of 2021. In the 2010s, members began learning about sociocracy and began efforts to transition the operational and governance structure to this model (McMahon et al., 2021).

Given that Unicorn made this transition from a collectivist organization using consensus, one might think that it would be relatively smooth; however, the two models have enough differences that implementing the new process requires diligence and work. By placing all members on the board of directors, Unicorn kept a feature of collectivist organization. The difference between a membership meeting and a board meeting has only to do with the scheduling and specific agenda items. Each member has a vote so the power of membership does not get defused into a smaller group of members. Decisions of the board are essentially decisions of the membership. The governance and management of the cooperative are decided by the membership.

3 Member Voice and Conflict Resolution

The management of conflict and workplace accountability differs widely within the worker cooperative community. As worker-owners, the members have an expectation of voice in their workplace, and this includes the ability to challenge authority and defend oneself against potential accusations (Hoffman, 2003). The area of dispute resolution (specifically discipline) operates as more of a governance function in worker co-ops than an operational function, and this can create problems if there are no clear guidelines for engagement (Vannucci & Singer, 2010). The danger in this arena arises from an imbalance between the rights of individual workers and the needs of the wider membership and the organization. Management of worker co-ops need to engage with progressive discipline models (in which response to violations of policy begin with training and education and increase in severity) and peer review, but also, they should have clear lines of acceptable behaviour and commit to protecting all workers in the co-op as well as other stakeholders and the integrity of the co-op itself. Allowing informal processes to develop forms a secondary danger, as members of privileged classes within the organization may benefit from the informal process to the detriment of the ability of the cooperative to embrace values of equality and equity (Freeman, 1972; Hoffman, 2005), and may even create toxic workplaces in which cliques can engage in power struggles (Hoffman, 2005; Vannucci & Singer, 2010). In this section, we will examine two relatively large worker co-ops and their model for resolving conflict, as well as examine how worker co-ops can engage with labour unions to create effective and transparent systems of accountability. Larger cooperatives such as Union Cab of Madison and Rainbow Grocery may have the capacity to create internal conflict resolution structures in a more conventional manner; however, smaller co-ops or those operating in markets with little overhead for support may find an alternative way of creating this necessary component of governance. For the latter, labour unions can provide a core benefit through collective bargaining agreements and grievance procedures.

3.1 Union Cab

Union Cab of Madison Cooperative (UCC) was formed in 1979 and has provided taxicab service to the community of Madison, Wisconsin in the United States ever since. Its membership has fluctuated periodically, but for the events and discussion described here, the membership hovered around 250 people. Unlike many modern taxicab cooperatives, UCC owns the vehicles, and the drivers along with all other employees (call centre, mechanics, accounting, and management) are members of the Cooperative. In 2011, after two years of planning, the Cooperative chose to remove discipline from management and to create a tribunal system in which peer councils would investigate and adjudicate complaints. Along with these councils, UCC also established support councils as a mediation system to help members manage internal conflict, and a stewards council to assist members in navigating the peer review system (McNamara, 2015). The process was codified in the Peer Review Policy and Work Practices Policy, in which the Board of Directors stated the intent “to foster and maintain a safe, humane, fair, respectful, and transparent framework for our working relationships while protecting the Cooperative from the destructive actions of [uncooperative] workers.... Our goal is to create a legitimate dispute resolutions and discipline system in an environment where all members take responsibility for their actions, the success of the Cooperative, and the morale of the membership” (UCC, 2014).

Importantly, Union Cab did not just create a means of tribunal accountability. They simultaneously created key support systems to provide alternative pathways to dispute resolution. These support systems included stewards and mediators who were trained to assist members to engage their voice for dispute resolution (stewards as advocates and mediators as impartial facilitators). Alternative dispute resolution programs have a proven history of helping organizations reduce turnover and create better working conditions by helping workers engage their voice and resolve communication problems and misunderstandings (Nabatchi, 2007; Ridley-Duff & Bennett, 2010).

3.2 Rainbow Grocery

Rainbow Grocery Cooperative (RGC) operates a single store in the Mission district of San Francisco. It is organized as a worker co-op and all workers are members of the co-op as part of their employment. Through its beginnings in the People’s Food System, a movement in the San Francisco Bay area to create access to healthy food with respect for workers, the community (Curl, 2009; Sacharoff, 2016), and sustainable growth of the business, the membership has been committed to flattened hierarchy and collectivist management. The co-op operates through 14 autonomous departments with a steering committee and a board of directors (all directors are worker-members). Each department controls its own hiring, scheduling, training, and accountability (Lawless & Reynolds, 2004).

Each department manages its own affairs with some exceptions. However, the standard format involves “notices”. A worker may receive a notice from the department coordinator if they fail to abide by the work rules of the organization and department. The due process occurs at the department level. If a worker receives three notices in a 12-month period, they undergo a “vote of confidence” within their department. The vote doesn’t ask if the person should be fired, it asks the department if they want to continue working with the individual. Prior to the point of issuing notices, however, the department may agree to additional coaching, training, and formal agreements between the worker and their co-workers in the department. The level of severity of the incident can allow steps to be skipped, and, in the case of sexual harassment or similar harassment around legally protected characteristics,Footnote 8 the issue may go before the Storewide Steering Committee (which also has a Grievance Committee) (Edgar, 2020). The membership rights of the worker-member who has their employment terminated will also terminate after a certain amount of time to allow for any internal grievance process (this time period was 17 days in 2001) (RGC, 2001).

Worker cooperatives with a flattened hierarchy tend to also have a disciplinary process that consists of peer review. This avoids the power imbalance of hierarchal systems where a manager reporting only to the board decides the fate of frontline workers. In Rainbow’s case, the model also creates more responsibility for the workers to coach and support each other along the way. The proactive nature of Rainbow’s system builds the values of self-help, self-responsibility, solidarity, and democracy into the accountability structure. With over 200 workers, Rainbow demonstrates that size does not prevent a co-op from living the co-op values and principles.

3.3 Building Worker Power (Role of Union and Co-op Solidarity)

The union co-op model, a small but growing area of worker cooperation, can assist worker co-ops, especially larger worker co-ops, with creating space for workers’ voices and conflict resolution. The manner in which worker co-ops and labour unions engage varies depending on the size of the co-op, the specific labour union, and the industrial sector. For smaller cooperatives, the connection to a labour union may be more of an act of solidarity by the workers of the co-op. However, worker co-ops may decide on union membership for a number of reasons: e.g. assistance with conflict mediation, access to benefits, and the ability to push for pro-worker policy changes in their industry (Huertas-Noble, 2016). In addition, a worker co-op engaging in a collective bargaining agreement may also help streamline policy development as many of the traditional policies considered by a worker co-op board of directors (hiring, pay, scheduling, discipline, etc.) would be covered by the collective bargaining agreement.

Unions can assist cooperatives with creating a disciplinary system based on due process and can limit informal processes that may undermine the mission, values, and principles upon which co-ops build their organizations. The collective bargaining agreement becomes a core document, a policy manual that has legal authority within the organization. This limits management or the board’s ability to succumb to isomorphic forces to roll back on values-based practices in the interest of financial goals. In the USW-Mondragon model, the Union Committee takes on the role of the Social Council in the Mondragon system. The union then provides a clear voice for workers’ rights and acts as a “watchdog” on both management and the board of directors.

The union co-op model also helps to build worker power in society. Worker cooperatives offer a different version of how companies can operate in an industry. This example of a different path, one committed to meeting human needs over investor profits, assists labour unions in creating policy goals at the regional and federal levels. This may include efforts to raise the minimum wage, add key benefits such as paid time off, and adjust industry regulations to create a more even playing field between worker-owned and investor-owned companies. An example of the latter involves the efforts by the Communication Workers of America (CWA) to open the taxicab market in Denver, Colorado, a regulated monopoly, with the goal of establishing a worker cooperative taxicab company (Bolton, 2016). Another example can be found in the work of the Service Employees International Union—United Healthcare Workers West (SEIU-UHWW). This union went beyond simply representing Licensed Travelling Nurses (LVNs) in California; they helped these workers create a worker cooperative, Nursing and Caregivers Cooperative, Inc. By utilizing the network created by the labour union, organizers were able to organize workers who would normally be isolated in their work and create a co-op that, allied with SEIU-UHWW, can create a new organizational model for the industry focused on the needs of the LVNs. As the modern work environment becomes more complex with independent contractor status gaining ground through the “gig economy”, the combined efforts of labour unions and worker cooperatives can build on solidarity to create more stable and humanistic employment.

4 Challenges with Growth

Many worker co-ops begin as relatively small organizations. This allows a common purpose and vision to be shared among the members. Further, the decision-making process, even if using majority rule parliamentary procedures, tends to have a collectivist feel to it. Growth can be a challenge for worker co-ops, as it brings in more voices than the initial governance system can provide meaningful space for. This can result in shifting to more of a representative democratic model, where a small subset of worker-members makes key decisions. Co-ops may need to grow to increase benefits to their members, maintain market share, and remain viable organizations. This problem is somewhat unique for worker co-ops since adding membership means adding workers. Where consumer co-ops can grow membership without adding staff, worker co-ops must do both. Worker cooperatives need to engage proactively to manage growth so that it provides a benefit to its members (creating economies of scale, for example). By growing strategically, worker co-ops can adjust governance and management models to continue to meet member needs without losing the cooperative difference or succumbing to isomorphism by adopting best practices of their (capitalist-dominated) industry.

The cooperative examples provided in this chapter (with the exception of Burial Grounds)—Cooperative Home Care Associates, Unicorn Grocery, Rainbow Grocery, and Union Cab—all represent relatively large cooperatives, with the smallest (Unicorn) having just over 70 worker-members. However, each has found ways to incorporate governance and management models to create more humanistic and people-centred systems. For some, this involves a flattened hierarchy to create smaller working groups and consensus-style decision-making (Rainbow and Unicorn). CHCA, the largest of the case studies, creates a type of watchdog group through the union to help keep management and the board focused on the needs of the worker-members. CHCA accomplishes this through a collective bargaining agreement with SEIU. Union Cab spun off management’s traditional enforcement duties to a peer council and built stronger team management systems that provided support for monitoring systems and behaviour. In each of these examples, the worker co-op and democratic decision-making model demonstrates how co-ops focus on the needs of their members and adjust operations, management, and governance to create a human-centric workplace.

Smaller co-ops can look to these examples of larger co-ops and how they have worked to maintain a humanistic governance model. A key idea for small co-ops to build into their planning is that the governance structure that they use with nine members may not serve ninety members. Part of strategic planning for the cooperative should include how to maintain a people-centered governance model as part of managing growth in the cooperative.

5 Conclusions

Worker cooperatives occupy a unique space within the cooperative community. The combination of member and worker stakeholders in one person creates the need to address operations, management, and governance with a focus on the values and principles of cooperation. The traditional separation of governance and operations becomes more nuanced since the fundamental benefit for members of a worker co-op includes safe and humane practices in the co-op’s operations. While consumer or producer cooperatives establish clear policy guidance to management in terms of staff treatment, the board of a worker co-op consists of frontline workers whose lived experience measures the ability of the co-op to achieve its mission and engage the cooperative identity.

Democracy goes beyond simply voting for representatives as it might in other types of co-ops with large memberships. This means creating safe and dignified working conditions and building organizational structures that emphasize member voice through their input. This creates a cooperative advantage by building loyalty and solidarity within the organization by amplifying member's voice. As worker cooperatives grow in size, they need to regularly re-examine their governance and operational models to ensure that they are maintaining a member focus. An engaged membership allows the co-op to resist isomorphism in their industry, creating a pathway for members to bring information from the frontlines into the organization’s governance bodies, creating a connection with their community, and building a cooperative difference that consumers and vendors can experience.

Worker co-ops have used a number of strategies to build democratic processes into their operations and governance. There are ways of organizing work such that the democratic workplace environment remains accessible (e.g. Rainbow Grocery, Burial Grounds); some decision-making processes such as sociocracy allow cooperatives to maintain engagement with workers at various levels of scale by creating hierarchies of work, not of power (e.g. Unicorn Grocery Co-op). Other co-ops create internal structures that rethink the traditional concept of management and decision-making (e.g. Union Cab of Madison). Finally, some co-ops have partnered with allies in the labour movement to help leverage worker power externally and create internal watchdogs on organizational centres of power (e.g. CHCA, union co-ops). The goal of each of these diverse types of management and governance models aims to create humanized workplaces that elevate the individual worker above the organization’s bottom line, while also building a competitive advantage through member voice and loyalty.