Legal Analysis & Law Articles

Below, you will find legal articles that continue the discussion on how State and Federal law applies to different cooperative structures and operations. If you would like to submit an article for publication, please contact Ricardo of the Sustainable Economies Law Center at

(Mostly) Law Journal Articles

Schwartz, Justin. “Where Did Mill Go Wrong? Why Capital Managed Firm Rather than Labor Managed Enterprse is the Predominate Orgnizational Form in the Market Economies. OHIO STATE LAW JOURNAL [Vol. 73:2 2012]

A law review article on labor vs. capital managed firms. The paper disproves the myth that capitalist firms are somehow inherently more efficient than cooperative business structures and proposed that the “collective action problem” is more to blame for the dearth of cooperative businesses than structural inefficiencies in “cooperative” firms.

Ellerman, David, and Peter Pitegoff. “Democratic Corporation: The New Worker Cooperative Statute in Massachusetts, The.” NYU Rev. L. & Soc. Change 11 (1982): 441

“The Democratic Corporation: The new worker cooperative statute in MA,” explains the trail blazing law enacted in 1982 in Massachusetts. It was the first statute enacted in the US specifically for worker cooperatives. It heralded the beginning of a “new wave” of cooperative corporations, specifically focusing on worker ownership, and was picked up and replicated in at least 6 other states. This article addresses the thinking, theory, and ideals that were used to create the United States’ first worker cooperative corporation. Heavily influenced by the Mondragon Cooperatives of Spain, Ellerman and Pitegoff explain how this statute was attempting transform the corporate form into a democratic social institution.


“The Democratic Corporation” provides an overview of the labor theory of property, democratic theory, the democratic firm, worker cooperatives, ESOPs, a model of a hybrid democratic firm, two case studies on self management and employee sovereignty in Yugoslavia and Japan (respectively), and a few strategy options to increase economic democracy domestically and abroad. Ellerman argues that capitalism “suffers from a deep-lying inconsistency wherein it violates the basic principles of democracy and private property.” In the paper, he focuses on the “ideas, structures, and principles involved in the democratic firm and in economic democracy,” such as how the employment contract could be replaced by a membership relation  in economic democracy, as well as a critique of the employment contract itself. The paper explores the theory and practice of democratic firms, “from philosophical first principles to legal theory and finally down to some of the details of financial structure.”

Plerhoples, Alicia. “Representing Social Enterprise.” Clinical Law Review 20 (2013): 215-265.

This article looks at how social enterprises could be a model that creates an alternative path away from the conventional corporate structures and the environmental, social, and economic degradation that the relentless pursuit of profit maximization exacerbates. Plerhoples continues the conversation about how to define what a “sustainable business” is and how “corporate leaders are increasingly focusing on sustainability issues and targeting governance practices as a method of achieving sustainability goals.” Her paper explores these topics through the lens of the Social Enterprise and Nonprofit Law Clinic at Georgetown University Law Center (SENL Clinic) which she runs. She explains that students “serving social enterprise clients provides… the opportunity to critically examine corporate laws and norms that perpetuate corporate harms to the communities and the environment in which they operate.”

Baarda, James R. Cooperatives and Income Tax Principles University of Arkansas, LLM Course, 2007

Cooperatives and Income Tax Principles by James R. Baarda University of Arkansas, LLM Course, 2007. In this 224 page treatise, Baarda examines the cooperative tax structures through the corporate form and provides a history and rationale for the many areas of nuanced cooperative taxation by both the IRS and judicial rulings. Baarda explores the ways the court has interpreted how patronage, dividends, refunds, subchapter T, and other issues should be treated within cooperatives. He provides ample legal opinions at length and explores how each one has created the modern tax system around the cooperative corporate form.

Neil A. Helfman, Esq. Articles

Neil A. Helfman is a Richmond, California based attorney dealing primarily with litigation, has served as counsel and advised workers cooperatives. He has written a number of legal articles on a variety of legal subjects including: establishing the elements of fraud, piercing the corporate veil, choosing a cooperative under IRS Subchapter T, the application labor law to workers’ cooperatives.

The Application of Labor Laws to Workers’ Cooperatives

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Choosing a Workers’ Cooperative-Another Way of Doing Business in California

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Cooperative Conditions: CA Law Allows for Flexible Application of Operative Principles of Coops

A very nice “Coop Law 101” article explaining in a succinct manner the different areas of law that cooperatives must face when forming under California’s Consumer Cooperative Corporation.

Copyright 2013 Los Angeles Lawyer magazine

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The Policy Advocacy Clinic at UC Berkeley’s Boalt School of Law: Policy Memos

The Policy Advocacy Clinic at UC Berkeley’s Boalt School of Law wrote a series of legal memos for the Worker Cooperative Coalition during the Summer and Fall of 2013. These memos provided guidance in the creation of California’s first legal entity specifically for worker cooperatives.


This memo provides an analysis of the question: Under what circumstances can members of a worker cooperative unionize?

Indivisible Reserves Memo

This memo provides an analysis of the question: What are indivisible reserves, and what are the benefits and limitations of implementing them for worker cooperatives?

Gross Receipts Fee Memo

This memo provides an analysis of the question: Are California LLCs that elect corporate taxation subject to the gross receipts fee?

DLSE Employee Definition Memo

This memo provides an analysis of the question: When will the Department of Labor Standards Enforcement (DLSE) consider workers in a worker cooperative employees for the purpose of enforcing minimum wage

DLSE Corporate Tax Memo

This memo provides an analysis of the question: Does an LLC’s election of corporate taxation create a presumption of employment for the Department of Labor Standards Enforcement’s (DLSE) enforcement of wage and hour laws?

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