On Wednesday, February 12, 2020, the House Small Business Committee convened a hearing “Challenges and Benefits of Employee-owned Small Businesses” to discuss the employee ownership model. Members who attended, including Reps. Velázquez (D-NY-7), Chabot (R-OH-1), Balderson (D-OH-12), Kim (D-NJ-3), Golden (D-ME-2), Davids (D-KS-3), Finkenhauer (D-IA-1), Craig (D-MN-2), Delgado (D-NY-19), Bishop (R-NC-9), Spano (R-FL-15), Burchett (R-TN-2), and Stauber (R-MN-8) learned about the benefits of employee ownership for business owners, their employees, and their local economies.

Witnesses for the hearing included Daniel Goldstein, President and CEO of Folience; R.L. Condra, Vice President of Advocacy and Government Programs, National Cooperative Bank (USFWC member), John Abrams, CEO and Co-Owner, South Mountain Company (USFWC Member), and Mark Gillming, Senior Vice President, Messer Construction Company.

“Worker ownership has been far more meaningful and valuable than I ever imagined. There’s no question in my mind that it has been a critical factor in our modest long-term success.”

– John Abrams, South Mountain Company

The hearing explored some of the challenges businesses face in converting to a co-op or ESOP model, as well as ways current federal programs can be optimized to minimize those challenges.

A few highlights from the hearing:

Rep. Velázquez expressed her commitment to ensure the Small Business Administration finds a solution to the personal guarantee barrier for cooperatives;

Additionally, Rep. Velázquez will meet with a roundtable of Small Business Development Centers, and will speak with them about promoting worker ownership with this group;

Likewise, Rep. Golden is interested in spreading education and outreach about employee ownership;

Rep. Balderson probed for information about how the Small Business Committee can address healthcare needs for workers; and

Rep. Stauber praised small business owners like the panelists for their innovative, common-sense solutions

The USFWC is pleased to see this commitment to ensuring worker ownership becomes a widely known solution for businesses across the country, and are excited to see our efforts and the efforts of our members and partners coming to fruition over the last three years. Stay tuned for more information to come on developments from this hearing.

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