Exemption Sought For Co-op Member Labor Programs

[Shady DeJong and Kathleen Campbell from La Montanita Food Co-op contributed the following report.]

When La Montanita Food Co-op was told by the Labor Department that our participating member program did not conform to the Fair Labor Standards Act (FLSA), we were not quite sure what we wanted to do. (See 'Minimum Wage, Maximum Stress," CG #32, January-February 1991.)

The Labor Department told La Montanita that we would have to keep records to show that the discount participating members received was equivalent to (or more than) minimum wage per hour worked, and pay suitable worker's compensation insurance for all volunteer workers. We knew that we would have to discontinue the program unless we wanted a legal battle. When we contacted co-ops across the country, most voiced their outrage at the pressures that were being placed on our store, but few had experience with such matters. We were not sure how much support there would be for pursuing an exemption -- but we could not sit still.

We have chosen to form the National Coalition for Fair Cooperative Legislation (NCFCL). Our first task is to create an exemption to the FLSA, so that food cooperatives nationwide will be able to offer members a discount on purchases in exchange for participating at the store. We feel that this is the right of member/owners who hold an interest in their own stores -- inviting community members to take an active and participating interest in the store is important to the cooperative movement and essential in spawning new cooperatives.

Is such an exemption possible? There are actually 22 exemptions to the FSLA minimum wage law. For example, waitresses and waiters can receive a wage that is lower than minimum wage while also receiving tips from their customers. The protections of the Fair Labor Standards Act never were intended to apply to cooperatives and member/owners who are contributing their time.

The benefit of coreworker programs goes far beyond a discount. It creates a sense of community, education and belonging for member/owners and paid staff. The tragedy is that those most affected are students, low and middle income and the elderly. They are being targeted by a law not meant to apply to them.

In fact, cooperatives encourage participation for reasons that sometimes transcend economics. The coreworker program was essential in aiding La Montanita's growth from an all volunteer storefront operation to a member owned multimillion dollar natural foods marketplace. However, when we researched the financial aspect of our member labor program, we found that there was no financial benefit to the store to be gained by keeping it.

If we value cooperatives, then we must demand laws that allow them to maintain their viability. The National Coalition for Fair Cooperative Legislation (NCFCL) is seeking support in its efforts to clear the legal hurdles that discourage the expansion of cooperative ventures. We are seeking Congressional sponsors for the proposed exemptions and will need the assistance of coops around the country. Watch for the information packet coming to your cooperative in the weeks ahead.

To be added to our mailing list, make a donation, or pass on project suggestions, please contact us at:

NCFCL, c/o
La Montanita Food Cooperative
3500 Central SE
Albuquerque, NM 87106
ATT: Wade McIntyre, BOD.

In response to this article, "Non-Working, Non-Worrying" member Paul Cultrera shares his experience as a co-op manager as well as a member in the September-October 1991 issue of Cooperative Grocer:

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