Will Work for Food? Co-op Programs End Amid Labor-law Fears

ALBANY, N.Y. (AP) — Food cooperative programs that allow members to scoop rice, sort organic vegetables and ring up sales in return for grocery discounts are fading fast amid a changing marketplace and fears of violating labor laws.

The member labor or volunteer programs are intertwined with the do-it-yourself idealism that launched a wave of co-ops in the '70s. But they have become rare. At Albany's Honest Weight Food Co-Op, an effort to drop its volunteer program has riled members, illustrating its cherished place in co-op culture.

Supporters say the involvement of member-owners differentiates co-ops in an age where even strip-mall supermarkets sell locally grown arugula.

"It changes people's relationship with the store," said Nate Horwitz, a 28-year member who became board president last month. "Where people work together, you have a very different feeling in the store. You have a very different loyalty to the store."

Working member programs were a basic feature of co-ops, launched decades ago during a flush of interest in natural living and alternatives to big capitalism. The programs offered cheap labor for stores with little capital and fit in snugly with co-op principles like open membership and democratic control.

"Everybody pitched in — 'Let's make the staff!' — and they did it with almost no money to start these businesses," said Stuart Reid, of the Food Co-op Initiative, which helps groups organize food co-ops. "And that's evolved a lot. Now we're competing against very sophisticated natural food marketers. And we're not running out of a cigar box on the counter anymore."

Early co-ops foreshadowed the wider public's interest in local, wholesome food and then benefited once the wave hit. Honest Weight began in a cramped side-street store and is now a bright, modern market that rings up about $25 million annually in sales. It is among more than 200 co-ops nationwide that have combined sales of over $1.8 billion, according to a trade group.

Honest Weight's former board president mentioned the inefficiency of having roughly 1,200 working members cover shifts in explaining a board vote this fall to discontinue the program on the store's floor. Board members rescinded that vote after being told they overstepped their authority. But the initial uproar led to a shake-up of the board that cost the president his position.

The larger issue weighing on the board at Honest Weight and other co-ops is the fear that labor officials could classify their working members as employees rather than volunteers, leaving them open to charges they are violating minimum-wage rules. A small number of co-ops nationwide have settled complaints over the decades instead of testing that interpretation, according to longtime observers.

At Honest Weight, Horwitz believes there's no real evidence of a threat until labor officials go after co-ops. His belief is: Why change now?

But Honest Weight representatives who met with state labor officials this month said they were told that "the potential risks of being found out of legal compliance were high."

"The time to make a change is now, before we have a complaint filed against us," said board member Deborah Dennis. "And I don't think our membership is there yet. I don't know what's going to happen."

It's not clear how many food co-ops still maintain their programs, though the list gets shorter each year.

City Market in Burlington, Vermont, this year finished phasing out of its traditional member work program in favor of one that gives members credit for out-of-store community volunteering. East End Food Co-op in Pittsburgh ended its volunteer program last September. Bloomingfoods of Bloomington, Indiana, ended its limited program recently after implementing its first union contract for employees.

One big exception is the 16,700-member Park Slope Food Coop in Brooklyn, which requires most of its members to work. The Brooklyn co-op is structured a bit differently from many others; significantly, members don't get discounts, and the store is not open to non-members.

General coordinator Ann Herpel said the program has never run into trouble.

"It's a cultural value we have," Herpel said. "We think that cooperatives are about working together."

In Albany, the co-op board with Horwitz and two other new members is discussing what to do next. The program's fate will ultimately be up to members, but that is not expected to happen soon.

"I really expect that the board will be wrestling with this for the next few months," Dennis said.

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This story has been corrected to show Horwitz became president last month, not this month.

January 3, 2016 5:58 PM EST, Associated Press