Employee Ownership Blog

Corey Rosen

Study Finds Employee Ownership Provides Best Worker Outcomes in Business Transitions

A new study by the Brookings Institution and Washington University’s Olin Business School finds that employees are significantly more likely to remain working for their employer and to be satisfied with their jobs in companies that transition ownership through ESOPs and other employee ownership models compared to other business transition models. The study also recommends that Congress pass the Promotion and Expansion of Private Employee Ownership Act of 2023 and support efforts of private equity firms, such as those involved with Ownership Works, to include employee ownership in business transitions.

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Corey Rosen

Department of Labor Sends Proposed ESOP Valuation Rules to OMB

We will post an update when the OMB completes its review of the proposed regulations, which should happen before the end of 2024.

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Corey Rosen

New NCEO Paper on Private Equity and Employee Ownership

In the last several years, there has been a growing trend for private equity firms to include broad-based employee ownership programs in their transactions. This trend has gained national attention, with stories on 60 Minutes, Freakonomics, the New York Times, and many other news outlets. The new paper Private Equity and Employee Ownership (PDF; also see the embedded version below) by NCEO founder Corey Rosen looks at the history of private equity and employee ownership in the 1980s and the current wave of interest among some large private equity firms in sharing ownership with employees.

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Timothy Garbinsky

Rutgers Announces University EO Consortium

Rutgers University just launched the University Consortium on Employee Share Ownership, which is "dedicated to fostering collaboration among university-based initiatives that advance the study and practice of employee share ownership." In a press release from October 22, the school's Institute for the Study of Employee Ownership and Profit Sharing announced that, in convening 12 universities for this express purpose, it has created the first higher education network in the employee ownership space.

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Nancy Wiefek

New Research on Feeling Like an Owner

ESOP companies know that helping employees feel like an owner is key to getting the best outcomes. Still, creating that feeling in day-to-day operations is a complex task requiring more than just putting high-performance management practices in place. Companies must also create positive feelings and a connection to the company. This mindset can give ESOP companies a unique advantage over traditional companies.

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Corey Rosen

Supreme Court Declines to Review Denial of Attorney Fees to Defendants Where DOL Decisively Lost Case

In Su v. Bowers, D.C., No. 1:18-cv-00155SOMWRP (Oct. 14, 2024), the Supreme Court declined to hear an appeal of a January 7, 2024, Ninth Circuit ruling (Jan. 7, 2024) that the Department of Labor did not have to pay attorneys’ fees to the defendant attorneys in a valuation case the DOL decisively lost. In that earlier case, Walsh v. Bowers, et al., a court definitively ruled for the defendants against the DOL because the trustee had a sufficient (albeit short) amount of time to vet the ESOP transaction, had unfettered discretion to hire its own independent appraiser, and had negotiated the deal and even saved the ESOP money. Nevertheless, the Ninth Circuit reaffirmed an earlier ruling that “the district court did not abuse its discretion in denying attorneys’ fees. In hindsight, the Department of Labor’s case had many flaws. But the district court did not err in concluding that the government was ‘substantially justified’ in its litigation position when it went to trial. The government’s expert, despite his errors, arguably had a reasonable basis—at least at the time of trial—in questioning whether the company’s profits could surge by millions of dollars in just months.”

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Corey Rosen

NC, IN, GA, WI, MO Designate October as Employee Ownership Month 

Governor Roy Cooper of North Carolina has declared October as employee ownership month. Among other things, Cooper said that “employee ownership drives the creation of wealth and helps to close the wealth gap for North Carolinians, as employee owners are shown to have more than twice the retirement savings as their peers and greater financial assets overall.”

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Loren Rodgers

Nominations Being Accepted for NCEO Board of Directors

Annual elections for our board of directors will take place in January. NCEO members in good standing are invited to nominate themselves or other members during the nomination window, from now through December 6, 2024.

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Loren Rodgers

The Assistant Secretary of Labor in Conversation with the NCEO

On September 19, 2024, the Assistant Secretary of Labor, Lisa M. Gomez, attended the NCEO’s Fall Forum to address attendees. In her role as the head of the Employee Benefits Security Administration (EBSA), Assistant Secretary Gomez is involved in key issues that affect the employee ownership community, including both regulation and promotion.

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