Bill would reserve worker board seats at large co‑ops; employees, unions and co‑op leaders spar in hearing

Representative Cindy Ryu (D‑30th) introduced House Bill 1635 on Feb. 12, proposing that large cooperative associations and consumer cooperatives with 2,500 or more employees worldwide reserve two board seats for non‑supervisory employees selected by their fellow non‑supervisory employees.

"If they purport to be membership driven, then why are they basically cutting out employees who do not have that multinational CEO type of experience?" Representative Cindy Ryu said during the hearing, arguing that employees provide ground‑level knowledge that would benefit large cooperatives.

Staff described the bill's mechanics: cooperative associations formed under the Cooperative Associations Act and consumer cooperatives under the Nonprofit Miscellaneous and Mutual Corporations Act that have 2,500 or more employees worldwide must specify in their articles of incorporation or bylaws that two board positions be reserved for persons who are not supervisory or managerial employees at the time they serve as directors. Those employee directors would be selected by a majority vote among the corporation's non‑supervisory and non‑managerial employees, and would be restricted from voting on matters relating to wages, benefits, or other terms or conditions of employment affecting non‑supervisory employees.

Workers from REI and others testified in support. "I was also shocked to learn that REI banned workers from the board," Shimona Moreno, executive director of 350 Seattle and an REI member and board candidate, said, adding that workers should be able to serve to hold cooperatives to founding values. Employees who testified described union negotiations with REI and said board access would provide a formal channel for worker perspectives. Anders Soderquist, an REI employee, said he supports the bill after observing REI’s board and corporate conduct.

Labor and some cooperative leaders also testified in favor. Dustin Lambo of UFCW 3000 said the bill "is about reinforcing the cooperative principles of democracy and community engagement," and pointed to other cooperatives that include worker representation.

Opponents and neutral witnesses raised legal, practical and constitutional concerns. Michael Hutchings, speaking in his individual capacity and identifying experience advising cooperatives and serving on the PCC Natural Markets board, said a legislative mandate for designated employee board seats risks conflicts of interest, legal exposure for employee‑directors, and could set a precedent that would invite other designated seats for interest groups. "Mandating through legislation employee board seats is fundamentally flawed and will create significant problems," Hutchings said.

Committee members asked several technical and policy questions about thresholds and comparability to other employee‑ownership models such as employee stock ownership plans. Representative Abel asked why the bill uses the 2,500‑employee threshold; proponents noted that the threshold targets very large cooperatives and that some co‑ops (for example, PCC) already include worker representation voluntarily.

No committee vote was recorded on Feb. 12; the item was held as a public hearing with multiple panels of supporters and opponents.

Ending: The bill remains in committee for further consideration and drafting; sponsors and stakeholders indicated willingness to discuss threshold and drafting details.