Three Issues Facing Our Co-op

—By Martha Hotchkiss, Board Chair  

Since last May, the HPC board of directors has been engaged in reviewing three distinct but interconnected issues: the volunteer program, the discount structure, and the future.

In May of 2015, a review of our finances by a local CPA who has worked with other local co-ops for many years alerted us to potential legal and financial liabilities associated with our volunteer program, which serves about 10% of our active members. Namely, that while we prefer to call our working members “volunteers,” the federal Department of Labor (DOL) would likely classify them as “employees,” and as such, would expect that our volunteers get paid minimum wage as mandated by the Fair Labor Standards Act (FLSA). There are now over 20 years of case law history that make it seem very probable that the DOL would find our program out of compliance with labor regulations. Our bylaws, Article VII, Section 1, and numerous policies compel us to make decisions in compliance with the law. There is also no language in our bylaws that specifically requires Hampden Park Coop to maintain a volunteer program as a part of its  business model.

We’ve had to carefully consider what the FLSA says about employees: How many of us work in operations? Are supervised by a staff member? Complete work that staff members also do? Most of us that volunteer would answer “yes” to some or all of these questions. There are also other tests that the DOL uses to establish whether an individual should be considered an employee. And we’ve had to get familiar with FLSA definitions of volunteer: Is our volunteer time for charitable, humane, religious, or educational purposes? Do we volunteer without compensation? These are queries that pertain to nonprofits, so we would answer “no” because we are a for-profit cooperative, which is why we think that as it is currently constructed, our program is not compliant with labor law.

Yet we hold the sense of community at HPC close, and recognize that it largely has been fostered and sustained  by the relationships built within our working member program. Contending with these, our lack of compliance with FLSA regulations elicits feelings of sadness and loss for some. We hold a space for those feelings, and recognize diversity in how members process the conversations and information. That is why the board is committed to searching for options to maintain member involvement that comply with labor law.

The second issue we have been reviewing is the current 10-tier discount structure that has evolved over time, which includes tiered discounts for volunteers as well as for seniors. Concerns arose when financial statements showed that 6.5% of sales are consumed by discounts that members claim at the register. (For reference, a range of 1 to 2% is typical for co-ops without volunteer programs.) This means that after paying the bills, there currently isn’t enough money available to adequately reinvest in the business, including the ability to offer benefits and competitive wages to staff, maintain the building in a timely manner, and plan for the co-op’s future. The discount structure at one time was sustainable for our co-op; now, it presents a threat to the survival of HPC. Cooperative values call for equal access to co-op capital by all members. The discount structure as it is currently being used distributes the largest amount of capital in the form of discounts to a core of members, but is not distributed democratically as is called for in the cooperative principles.

Lastly, we have been envisioning what our future holds for us: How do we initiate change in alignment with our core values, while still being recognizable as the cooperative grocery store you know and love? What is our capacity for change right now? How do we grow our co-op into greater financial security, while envisioning a future that serves member vision and community values? How might we invite more neighbors to become members of Hampden Park Co-op? And, equally important, how do we grow sustainably in a thoughtful way?  As we explore lasting options for member involvement, we’ll need you, our members, to be the engine for that  search. As a board, our most important role is to maintain Hampden Park Co-op as a viable, legal business that supports the community of which it has so long been a part. We hope that all of you as members will support us and the cooperative by shopping in our store, sharing your visions of the future, and contributing your feedback in the ways in which we can stay connected as a community in the constant reality of change.