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Catalyzing worker co-ops & the solidarity economy

How White Electric Coffee Became a Worker Co-op

Article type
Repost
December 9, 2021
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[Editor's note: This past August, two members of the White Electric Coffee worker co-op shared the story of how they first unionized their workplace and then purchased it, with members of the USFWC's Union Co-ops Council. Their presentation and the subsequent Q & A, which we have transcribed below, comprise the first 30 minutes or so of the video.]

 

Transcript

John McNamara: Yeah. OK, well, great. A lot to do this fall as we get closer and closer to National Co-op Month. But let's move over to our presentation today. I'm going to turn it over to Danny Cordova, and take it away.

Danny Cordova: Thank you. Hello, everyone. My name is Danny Cordova. I'm from Providence, Rhode Island. I'm twenty seven years old and like I stated before, I'm a worker-owner and treasurer with CUPS cooperative. That's the incorporated workers cooperative that's doing business as White Electric Coffee in Providence, Rhode Island. And I'm joined here with my colleague, Chloe Chassaing. If you want to introduce yourself real quick, Chloe. Unless she's not there anymore, and she can't hear me.

Chloe Chassaing: Hi, I'm Chloe. I'm here With Danny, a fellow worker owner. Thanks, Danny.

Danny Cordova: Yeah, and Chloe, feel free to interrupt me. I have a very kind of somewhat detailed outline of just everything that's happened in the past year, which has been really kind of been a blur, just thinking about everything that happened since last year with the pandemic, the Black Lives Matter protests and here in Providence, Rhode Island. It's been a lot and there's a lot of nitty gritty details what you probably know more than me. So feel free at any point to chime in and let people know if I'm wrong about something.

OK, so I'm just going to start with the business itself: White Electric Coffee. It's a cafe shop located in the west side of Providence. It's located across [from] three high schools, which I'm one of the alumni — Central High School located just right across the [from] shop. Yeah, so it's kind of a crazy thing about —  you know, just being in high school and just one day, like 'hey, one day that shop across the street, not only are you going to work there, but you're also going to be a co-owner there, too.' Which if you ever told me that while I was attending there, I would just not believe you, pretty much.

Like I said, it's been around since 2000, and it's been a pretty favorite place for people grabbing espresso drinks, grabbing some bagels, some pastries. It's a very nice chill atmosphere. We have a lot of that. We have a lot of indoor dining where you could just grab a laptop, you need to work on your essay for like a college class. And you could just, you know, just come in and just sit down and just have have a nice, relaxing time. And yeah, I've been working there since May of 2019. In September of 2020 the shop became unionized under CUPS, the Collaborative Union of Providence Service Workers, being the first coffee shop in the state of Rhode Island to do so. Following our unionization, the shop was listed for sale and us workers kind of just banded together and decided to purchase the business and convert it into a worker cooperative.

The business — the closing of the deal happened in April of this year and we have reopened as a workers co-operative since May of this year, and it's been a pretty exciting time. So I'm just going to go to the beginning and then just pretty much like fully lay all the great deets that we had and the journey that we had. So it kind of started last year with the pandemic. It obviously shook the food industry, just really changed a lot of people's lives, changed a lot of people's well-being, caused a lot of uncertainty. And White Electric Coffee was no exception. We kind of made a lot of business with, like I said before, we had three high schools located across the street from us, which, you know, we had a lot of students or teachers wanting like whether it's a bagel, or some lunch, or a cup of coffee, and then suddenly that just kind of went away. So there was a lot of uncertainty, and a lot of it seemed like the whole society was just kind of tearing itself apart. And then we kind of realized, I guess consciously, oh yeah, without these people, without these service workers keeping our food stocks, to keep bringing up our groceries, it seems like if those people are gone, it just seems like society kind of just goes up into chaos.

And the food industry has been pretty notoriously bad to its workers. You know, just having — it's very, very — just kind of pretty fraught, with the physical and emotional weight, where you're expected to go through, constantly supposed to be in a good mood, constantly making smiles, being told by your bosses when to smile and just say this and to do this. Like, there's pretty much really no way to advance. No really way to change your workplace. There's no one really — like, if it's a very large corporation, you really don't have much of a say on — any input to the company. And yeah, when — the shop closed down in March following the widespread closings, and stay at home orders that took effect, and we closed down, we went on unemployment. So luckily, we all managed to get unemployment. And by the way, for White Electric, it's one business. We're talking about one shop. It's not a chain and we're about 15 staff members at a time. But we all managed to get on unemployment just fine, and the shop reopened in May for takeout only. And while the shop was reopening that's when the Black Lives Matter protests following George Floyd's murder was really kind of taking the country by storm, and fed and inspired by the wide demand of racial and workplace justice due to those protests, and like a general kind of fear of uncertainty about COVID.

A few of our staff members, both current and former, decided to join together and write a letter of grievances to our owner, making a list of demands such as diverse hiring practices, and the establishment of a hiring committee made by the workers, wheelchair accessibility, paid sick time, paid time off, a living wage with regular pay pay raises, transparency with cafe finances, and the enrollment of implicit bias and racial sensitivity trainings, and also just kind of like a broad kind of rejection of white supremacy in the community. And around 40 current and former staff members endorsed a letter by signing it off. So the letter was sent to the owners in June of last year, and I just remember there being a lot of uncertainty on whether the owners would respond to the letter. Again we're very closely knit, so you know, we want this letter to open up a dialog. You know, just having a very internal dialog to make some changes to the cafe. Unfortunately, in July, that's when the owners decided to close the cafe and laid off the employees who signed the letter and planned to reopen the shop later, with new staff replacing the ones who signed the letter. We chose to launch an online petition demanding our jobs back, and ensuring that our list of demands, that we listed in the letter, would be met. This petition raised over four hundred signatures. Eventually, the owners relented and we got our jobs back, as well as some of the things we demanded in the letter, such as a wheelchair ramp in front of our shop. We got some pay raises. The owners did hire a few staff members of color and also the racial sensitivity trainings. So that was a great victory for us.

But in order to protect ourselves from any further retaliation, and making sure that we have lasting changes beyond these short term concessions, we decided to either join or form a union. We opted to form an independent union mainly because of our relatively small size, and that we didn't really believe that mainstream unions didn't really exactly line up with our political values. We also met with Mark Girsky, a labor lawyer and also a White Electric customer where we kind of drafted our bylaws; bylaws that reflected the nature of what we were doing. We are all about no traditional hierarchical structures and made a big emphasis of collective decision making process, which has been pretty much the nature of just working at White Electric. It was pretty much just like a workers co-op without being a worker co-op with just having an owner. We've always consciously formed together and make decisions on the day-to-day operations of running the shop and just collaborating with ourselves. And just we kind of had shift leads, but it was pretty much like a kind of title thing with not really much of a difference besides, like a regular barista.

So we don't want to keep a hierarchical — any kind of structure. And that's when the Collaborative Union of Providence Service Workers was formed, CUPS for short, in late August. We requested for voluntary recognition of our union. The owners accepted that, which was really great news. Following that process we had a card check in which the staff expressed overwhelming support of the union and thus the union has been official-ized. And it became the first unionized coffee shop in Rhode Island to do so. And I remember that day. We also had a cake. We planned to do this like big celebration where we're just like, 'Yeah, we did this like really hard thing!' It was a lot of work we did. It was a lot of work. It was very stressful. There was a lot of uncertainty. But it felt like all that hard work paid off. And we could just, you know, take a big rest and just take it easy. That was until later that night, when we received an email from the owners pretty much stating that they were planning to sell the shop. And yeah, and that was just a massive curve ball. In fairness, he did offer to offer to sell it to us.

Later the next day, we kind of just got together and just decided what to do next. You know, that's when the idea of just forming a worker co-op just kind of started flowing around. We we kind of have a basic understanding of what a worker co-op is. The idea of workers collectively owning the workplace, and decision-making would be planned out democratically. And we just kind of sat there and just envisioned, 'that would be great if that happens,' the changes we could do, the shop just having a natural, real kind of ownership to it. And yeah, we just pretty much agree that a lot of us — we were kind of really uncertain what to do, like how to even do it. We were complete novices at everything. Even forming the union, we had no idea where to even begin, but we all just really liked the idea of owning White Electric Coffee, that we just decided, 'Yeah, let's just try to make this happen.'.

And that's when we kind of just started looking. And like I said before, we're complete novices, but we are well-connected novices, meaning that we had plenty of resources. We knew some people that had some expertize in co-op development. Someone who worked with one of us knew someone who worked with the ICA Group, an organization that's dedicated to co-op development. We worked with a realtor who has experience with consulting with co-ops. We met with some folks with the The Local Enterprise Assistance Fund. We also met with folks over at Fortnight Wine Bar, which is a workers cooperative in Providence. We just talked to a bunch of people and, you know, just trying to get some form of help. A big co-op we have here in Providence is Urban Greens, which is also a co-op grocery store, and that's where we learned about the Cooperative Fund of New England, and that's where we met Maggie. And we got our primary loan, which was approved in December. And there was also a grassroots fundraising campaign, which was a very overwhelming experience because it was just a lot of people, getting very, very excited with the idea of having a worker-owned cafe in Providence. And we've raised about $55,000. So there was also a great community angle to our rising up, in our story.  A lot of people were really excited about this.

We were incorporated as a workers cooperative in November of 2020, under CUPS Cooperative Inc.. We also created a co-op bylaws, and in those bylaws we made an emphasis on consensus decision making processes, of doing regular meetings, and member patronage. None of this was guaranteed, however, in January of 2021, the the owners decided to sell the business to us. The secondary loan with the Fund for Jobs Worth Owning with the ICA group, that is pretty much just for the conversion of worker cooperatives, was approved. Then we did some more fundraising, and then the deal was closed, and in April of this year we were given the keys to the shop. And in May, we officially reopened as White Electric Coffee, as a workers cooperative. I'll just wrap it up there and let Maggie talk.  

Maggie Cohn: I was thinking just because time is tight, that I am happy [indecipherable] and I can come to a meeting in the future, if people are interested in learning more about what CFNE does, and looks for in a loan applicant, and that would give a little more time for questions and answers and discussion. Do you think that makes sense?

John McNamara: Yeah, I think we can do that. If there are any questions, maybe get a stack in the chat, or if someone has an immediate question of just say it.

Lisabeth Ryder: I would like to invite the groups that have [indecipherable] to participate in our case study program, to have a case study written up about — you know, a short case study, not an academic treatise, but that would appear on our website with lessons learned and involving context, it's useful to other unions and other efforts around the country. And so what do you think?

John McNamara: I think that's for your Danny, you're willing to participate and.

Chloe Chassaing: I will say yes on our behalf.

Rebecca Lurie: It would be great to get this written up. I am curious, Maggie, how CFNE steps in — all of the ways a bunch of workers coming together and then putting together the proper documents, financials, legal and all that. Maybe summarize what role you played.

Maggie Cohn: Sure, so we — one of our main goals is to try to get an applicant as loan-ready as possible. We lend across the six states of New England and New York state, although not in New York City. So we will do a lot of work with a co-op on their financials and making sure that they have a business plan in place. I mean, what was great about working with CUPS was that they were already organized as a group, and I think a lot of that came from the union organizing that they did, and also that they were really well connected. We look for for applicants to be connected to sort of the co-op ecosystem locally or nationally, and CUPS was also really well hooked up in Providence, which means that they were able to get a lot of support through Urban Greens, through the Social Enterprise Greenhouse, from Matt and Worcester Roots and the U.S. Federation. And then we connect them to somebody who came in specifically to help them with their financial projections. And so in the end, they had projections that we had confidence in, they had a business plan, and they had a committed group of owners. So those are all things that we look for.

It's often, I have to say a little bit of a harder slog with applicants to get things in place. And I think CUPS came pretty well set up to apply to us for a loan.  And then the other thing that we do on an ongoing basis is stay in touch with our borrowers, so that ideally if there are problems that come up, we're in a position to address those early on. We can amend the loan if we have to do that. We offered a lot of applicants last summer periods with deferred payments, because everything got haywire during the pandemic and shutdowns, because what we want is to be more of a partner to our borrowers than a lender. We're not a bank. I say to people all the time, 'we're a nonprofit, we're a loan fund, we're mission driven and we want cooperatives to succeed.' So that's what we work towards. And if we do that in partnership with our borrowers, I think we're on a pretty good road to make that happen. I'll put my contact my email in the chat so that if people want to ask me anything about this afterwards, they can do that.

John McNamara: It sounds great. Thank you. Are there any other questions or reflections on the presentation? You have a few more minutes or so.

Rebecca Lurie: How hard was it to get the financials since the company was like, 'you can have it.' Were they forthcoming? Did you have to figure that out yourselves to understand the financial situation you were walking into?

Chloe Chassaing: I will just say it was hard. They did give us some information, but it was definitely challenging. There was a kind of — you know, it was on one surface it looks like, 'oh, they were offering to do this,' but it was kind of a very adversarial relationship the entire time. So everything was a little bit difficult. But we had a lot of help from — there's so many — I mean, there's people on this call too, like Arianna Levinson and Maggie was such a great help, and Matt and Rebecca. But also the Rhode Island Small Business Development Center, Josh Daly, he helped look at our finances. So a lot of people helped. It was really — it's still overwhelming thinking of how much help people gave us, and how just supportive people were, and how fundamental that was just getting to the finish line. But yeah, the finances — we did have some information, so that was definitely helpful. It enabled us to predict, you know, to forecast that we would be able to do all right from a business standpoint.

Danny Cordova: We have also met a lot of our projections and goals too, which was also very great to see — since we've re-opened the amount of support that we received. It's been great.

Mary Hoyer: Could I ask Chloe and Danny how you went about getting the business valued for the purchase? Who did you use, and how hard was it to find someone to do the valuation for the purchase? I realize that the financials, the pro formas, and the projections are all part of that, but sometimes — I mean, can you just address that issue about valuation?

Chloe Chassaing: Yeah, so we had a few. We had one valuation done in the process of the loan application with CFNE. Yup, Andy Danforth. I think that maybe that was a private message to me. But yes, Andy Danforth from — I guess he's associated with CBI in Maine and maybe also has his own accounting business as well. But he was really helpful. And then the Small Business Development Center, they also did kind of an informal one. So we got it from a few different angles. But Andy was kind of the more formal one that I think really helped. You know, helped us not only get the loan, but of course, for ourselves too. We didn't want to pour all this future money into the business that we didn't think was going to be successful.

Maggie Cohn: And the other thing with White Electric is that they bought the business, but they also bought the condo in which the business is located. So there was not just a business valuation, there was a property valuation that had to be done.

Shelley Miller: I had a question. You mentioned in your presentation that you chose to do an independent union because you didn't feel that existing unions were a good fit for you. Can can you elaborate on that a little more?

Chloe Chassaing: I mean, I can speak for myself. I think that, you know, it wasn't necessarily — we're very pro-union, so that wasn't meant to be a diss to unions. We're very pro-union. It was a few different things. Partly because we were just one shop — so a lot of mainstream unions, just sincerely aren't interested in organizing a little 15 person workplace. That's just the reality. And then also because we already had been organizing together and had, you know — we'd been meeting several times a week, sometimes every day, we kind of already had this very established trust, and decision making process. And when we found out that creating our own union was an option, it just felt very natural to do, just to kind of continue basically with how we were already making decisions together, and how we were already advocating for ourselves. So that was mainly it. And everything happened so quickly, too. So it wasn't like, we really — I don't know if that answers your question.

John McNamara: Shelley's muted, but yeah. Are there any other last questions, or maybe take one more, or... Great. Well, I want to thank Chloe and Danny and Maggie for showing up and sharing with us today. This is a really exciting story...

 

[This transcript has been edited for readability]

 

Comments

Mark

I am glad to hear this is working out so well. I remember seeing the original article and wondered how it would turn out.
I am curious though. Obviously, this initial group of workers has a lot invested here. I assume they didn't borrow all the money but invested a fair chunk of their own money to do this.
What happens when a new worker comes in? Do they have to buy in? If not, are they paid the same wage as someone who was actually one of the original investors?

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