Senate’s HELP Committee Holds Hearing on Employee Ownership
Yesterday, the Senate’s HELP (Health, Education, Labor, and Pensions) Committee held a hearing titled "Empowering Workers by Expanding Employee Ownership." As detailed in our previous post, this hearing was a rare example of a congressional hearing focused exclusively on employee ownership.
The committee heard testimony from a diverse group of witnesses, including senior leaders from ESOP companies and an academic expert, addressing the benefits of ESOPs and how to strengthen them.
Dr. Joseph Blasi of the Rutgers University Institute for the Study of Employee Ownership and Profit Sharing shared data on the stability and wealth-building potential of ESOPs, including significantly lower layoff rates and higher retirement account balances for employee-owners as compared to their non-employee-owner counterparts. He testified that “[o]ur research consistently shows that ESOPs provide a critical level of employment stability, with 0% of ESOP workers reporting layoffs in the past year, compared to 7% for non-ESOP counterparts.” Following the hearing, Dr. Blasi stated: “This hearing was the most extensive bipartisan set of reflections on ESOPs and employee ownership by both republican and democratic Senators. The CEOs of ESOP companies offered poignant stories. I believe the groundwork was laid for new financing legislation.”
The discussions highlighted a shared bipartisan commitment to expanding employee ownership. Both Senator Bill Cassidy (R-LA), chair of the HELP committee, and Senator Bernie Sanders (I-VT), ranking member, have been champions of this cause, and their efforts were on display.
Important legislative initiatives were brought into focus during the hearing. Senator Cassidy has introduced the Employee Ownership Representation Act and the Employee Ownership Fairness Act, while Senator Sanders is planning to reintroduce his Employee Ownership Financing Act. See our previous blog post to learn more about these bills.
The hearing offered a compelling look into the real-world impact of employee ownership. The committee heard firsthand from leaders like Bill Roark, executive chair of Starfish Holdings, who shared how their ESOP allows employees to “retire with dignity” and creates opportunities for advancement. Brock Barton, CFO at King Arthur Baking Company, highlighted how their nearly 30-year-old ESOP has been foundational to their success and has helped the company navigate economic downturns by fostering an engaged workforce where every employee-owner plays a vital role in navigating change and uncertainty. Eddy Dupuis, CEO of Acadian Companies, underscored the importance of the positive economic and social impact of their ESOP in the communities they operate in and the distinct long-term vision an ESOP offers as compared to other ownership transitions.
The discussion at the hearing sought to address key challenges and legislative opportunities. Recurring themes included the need for greater clarity around ESOP valuation rules, improved access to capital and loan programs to support employee ownership transactions, and expanded education and awareness efforts across government entities. Senators from both sides of the aisle demonstrated a shared commitment to overcoming these hurdles, like Senator Husted (R-OH), who called ESOPs “one of the most virtuous forms of capitalism.”
We will continue to monitor developments stemming from this hearing and will share any further updates as they emerge. Sign up for our email bulletin to stay in the know!