Proposed Bylaws, Including Membership and Governance
Definitions
In these bylaws and in all official DG documents the following expressions mean:
1. The cooperative or co-op: the incorporated business and storefront owned by the collected Members of Delridge Grocery.
2. The Board: The cooperative’s Board of Directors, consisting of one Consumer Member, one Worker Member, one Producer Member, one Secretary, one Treasurer, and one President.
3. Consumer Member: A person or company that purchases products sold by the cooperative. Consumer Members vote by majority to elect a Consumer Member to the Board of Directors.
4. Worker Member: A physical person that can do all types of work for and is employed for wages by the cooperative, or volunteers for the cooperative for a minimum of 48 hours per year. Worker Members vote by majority to elect a Worker Member to the Board of Directors. Worker Members must be employed by or volunteer for the cooperative for a minimum of 48 hours per calendar year to qualify as Workers; if their membership in this category lapses, their Membership reverts to a Consumer-type Membership, but will be reinstated in the previous category once the above criteria have been met. DG employees are not required to become Worker Members, but they may not receive profit rebates based on their wages unless they pay for a Membership share of any type, and they may not vote for their Worker representative on the Board unless they are Worker Members.
5. Producer Member: A person or company that has an economic or social interest in the achievement of the cooperative’s objects. This includes farmers, landlords, or other Members who sell products or services to the cooperative. Producer Members vote by majority to elect a Producer Member to the Board of Directors. Producer Members must sell at least $200.00-worth (amount necessary for qualification as a Producer Member changes according to a baseline value of $200.00 set on January 1st, 2012) of products or services to the cooperative per calendar year to qualify as Producers; if their membership in this category lapses, their Membership reverts to a Consumer-type Membership, but will be reinstated in the previous category once the appropriate criteria have been met.
6. Whole foods: foods which have been minimally processed and contain no more than two ingredients. For example: fruits and vegetables, flour, and dry bulk foods with anti-caking organic starches. Canned foods or breads which contain two or fewer ingredients may be acceptably defined as whole foods. For the purposes of this definition, water is not counted as an ingredient.
7 Sustainable: sustainable foods and products are made in accordance with the principles of organic soil maintenance, biodiversity preservation, carbon neutrality, 100% recyclability, fair trade, and zero pollution.
8. Affordable: in order to assure that it is affordable for those on a ‘food stamp budget’ to shop at Delridge Grocery, DG will work with a nutritionist to establish a mostly bulk-item meals plan and recipe guide within the first three years of store operation which, when followed, will allow a person who receives the standard allotment of food stamps per month to eat a whole-food organic diet purchased at DG which meets the United States Department of Agriculture guidelines for daily nutritional requirements, for a month. It is the responsibility of the store manager to review the prices of the food in that monthly meals plan once per year, within one month of the release of new government food stamp standards. If the store manager finds that the total price of the food in that plan purchased at DG for one month exceeds a monthly food stamp budget, the store manager will review pricing and purchasing practices until DG prices can be lowered sufficiently to remain affordable. The food stamp budget and meals plan will become the measure for DG’s affordability, and the meal plan and recipe book will be printed on 100% post-consumer recycled paper and sold at DG for the price of printing.
9. Charity: Product or monetary donations to organizations whose goals are consistent with those of the cooperative.
Objectives
The objectives of the cooperative, in order of importance, are to
1. Provide a place to buy a culturally-diverse range of affordable, sustainably-grown whole foods
2. Be a vertically-non-competitive form of business in which each link in the chain of commerce – from those who make the tools of farming to the person who eats the food – collaborates with the intent to make the other links stronger
3. After three years of operation, consistently provide family-friendly, full-time, living-wage employment with full benefits to members of the community who live in the storefront’s neighborhood
4. Provide a place to buy other sustainable products that are needed by the community, without compromising our first objective
5. Serve as a hub for local-food commerce
6. Facilitate other cooperative efforts in the community
7. Encourage healthy diet and exercise in the community
Governance
Board of Directors
Member eligibility
In order to be eligible for a position as a director, a member must have made the payments due on their shares, or on any other amount due to the cooperative, and be compliant with the other requirements of their membership type.
Number of directors
The board shall consist of six directors.
Group distribution of members
In order to form the Board, the members of the cooperative are distributed into three groups corresponding to the three classes of membership described in articles 3.C.3-
Each of these groups has the right to elect one Director to represent their type of Membership, but all Members vote to elect the Secretary, Treasurer, and President, as well as voting on all issues determined by the Board to be of concern to all types of members.
Director’s Terms of Office: A director’s term of office is three years, and there is no limit on the number of terms they may serve, whether those terms are consecutive or otherwise.
Director rotation procedure
1. During the first three years of the co-operative’s existence, the directors’ terms of office are as follows:
2. Two positions will come up for election after the first year, two positions after the second year and the last two positions after the third year;
3. A random draw will be held to decide which positions will come up for election after the first and second year;
4. The directors elected after this will have three-year terms.
Elections: Procedures for director nominations and elections, whether in ballot or meeting form
The cooperative’s President and Secretary are the election President and Secretary, unless they are up for election themselves.
1. The assembly appoints two returning officers and, if necessary, an election President and Secretary;
By agreeing to act in this capacity, these persons agree not to be nominated;
2. The election President reads the names of the directors whose mandates are ending and indicates to which office they belong;
3. If need be, the President will announce the positions that remain to be filled on the board of directors
4. The chairperson then informs the assembly of the following:
A. Directors whose mandates are finishing are eligible for re-election
B. Members from each group are entitled to nominate as many candidates as they wish
C. As soon as they are nominated, the chairperson makes sure that each candidate accepts the nomination. Any refusal automatically eliminates that candidate;
D. Candidacy nominations for each group will only end after an uncontested motion to do so has been duly accepted;
E. There will be an election if there are more candidates than positions available after the first elimination. If the number of candidates is equal to the number of positions, the candidates will be elected by acclamation. If a group’s number of candidates is less than the number of available positions, the members in attendance will have to nominate a candidate from the group in question;
F. If an election is held, it will be by secret ballot. A ballot is given to each member of a group who then writes the names of the candidates s/he has selected. The number of names on the ballot must correspond to the number of positions available for the group in question.
G. The returning officers count the ballots and present the results to the election president;
H. For each position with a vacancy, the president will declare the candidate that obtained the most votes to be elected, without revealing the number of votes obtained by each candidate;
I. In the advent that a group’s last available position results in a tied vote, another vote will be held with only the tied candidates in the running;
J. The director will be chosen by random draw, if there still exists a tie after the second ballot;
K. If a minimum of one third of the members from the group in question that are present at the meeting request it, a recount will be held. In that event, the candidates involved will witness the recount;
L. The election secretary will destroy the ballots immediately after the vote;
M. Any decision taken by the president in regards to the procedures is binding on the assembly, unless the voters who are present reverse this decision by a majority vote.
Board Meetings
1. The Board will meet not less than once every three months.
2. The meeting notice will be given by email and phone at least fourteen days before the appointed time of the meeting, except in the case of emergency.
3. By exception, the required notice period will be reduced to ten hours for an emergency. In the ten hours before emergency meetings, the Board President may take actions necessary to preserve the cooperative without consulting the Board.
4. All acts that were approved, or all resolutions that were adopted during any Board meeting are deemed to be proper and valid, even if it is later discovered that there were irregularities in a director’s nomination or that any of the directors are no longer qualified to be one.
Executive Committees
The Board is authorized to establish executive committees for such purposes as fundraising, projects, or charity.
Executive Officers’ Powers and Duties
Chair
The Chair’s duties are shared in equal consecutive rotation between the Consumer, Worker, and Producer Member-type representatives of the Board, with the Chair’s duties changing hands at the start of each meeting. The Chair:
A. Chairs the general assemblies and the Board meetings;
B. Ensures that the regulations are respected;
C. Enforces the decisions taken by the general assembly and by the Board;
Secretary
A. Is responsible for the taking of the minutes of the general assemblies and for those of the Board meetings;
B. Is responsible for the maintenance of the co-operative’s records and for the safekeeping of the register and of the archives;
C. Sends the general assembly and Board meeting notices;
D. Is without question the secretary of the Board and transmits what is required by law to different bodies;
E. Executes any tasks inherent to the function.
Treasurer
A. Has the immediate responsibility of the co-operative’s movable assets and capital property;
B. Is responsible for the safekeeping of the portfolio, of the funds and of the accounting books and is responsible for the bookkeeping;
C. Has to submit the accounts over which he has custody to an annual audit as well as to any statutory inspections;
D. Must see that the annual tax report is prepared during the three months that follow the end of every financial year; s/he must collaborate with the auditor and submit the annual report to the Board for approval;
E. Must conform to the Board’s instructions and offer them all information required by the Board.
President
A. Administers, steers, and controls the cooperative’s business, under the immediate supervision of the Board;
B. Is responsible for directing the store manager, hires the manager, reviews work distribution and determines wages according to the schedule established by the Board. The management team overseen by the President will consistent of a full time manager, part time staff, and volunteer staff the first year. The manager will be selected by the Board of Directors and approved by members by a 2/3 vote. The Board of Directors and members will delegate authority executively through the President to the management team to run daily operations and provide guidance oversight. The President also informs the Board of employee appointments, suspensions, dismissals, and layoffs;
C. Presents a monthly management report to the Board.
Consumer, Producer, and Worker Member representatives
A. Establish committees within their Member type constituencies so that they may vote on Board issues with awareness of what the majority of their Member group desires;
B. Bring issues from their Member groups to Board meetings to be voted on, and call Board meetings to address urgent issues;
C. Establish structures within their Member type groups to facilitate better organization of those of the cooperative’s functions which pertain only to business conducted by their Member type.
Member Meetings
General and Board Meetings
All meetings shall be held at the location, the date and the hour appointed by the Board.
Meeting notice
The meeting notice is given by email at least 14 days before the date named for the meeting. The decisions that are taken at a general meeting cannot be rescinded under the pretext that members did not receive or read the meeting notice.
Voting
Member voting takes place by ballot received at the cooperative and mailed in or placed in a ballot box at the cooperative, or by a show of hands at meetings, unless a majority of the members present at the meeting decide to do otherwise. Internal Board voting takes place by show of hands.
Representation
A member may not vote by proxy except when they have indicated in their membership file which specific members of their family or corporate partners may do so in their name.
Proposed Hiring and Firing Practices
Non-Discrimination
The cooperative will not refuse to hire an applicant, or treat an employee less favorably in the terms and conditions of employment, or fire an employee because of the race, color of skin, religion, sex, gender expression, sexual orientation, medical condition, political beliefs, country of citizenship (as long as applicable work visas are current), hair color or other body modification, criminal record, credit rating, first language, age or cultural traditions of the applicant or employee.
Benefits and Membership
Employees of the cooperative are not required to purchase memberships, but will not be able to vote on inclusion of an Employee Member in the Board or other co-op issues, or receive profit rebates, without purchasing the appropriate Membership. A new Employee automatically qualifies for full Membership once the Membership fee has been paid, but Membership in the Employee category will lapse after three months of failure to fulfill the Employee Membership requirements.
An employee is eligible to participate in any health and retirement benefits provided through the cooperative after working for the cooperative for six months. Employees will work with the Board through their representative on the Board to establish what those benefits should be; the Board’s goal should be to found these benefits before the end of three years’ operation.
Employees may not contribute volunteer hours to the cooperative.
Hiring and Firing
The Manager of the store has the responsibility of seeking and reviewing applicants for employment, while also reviewing applicants recommended by the Board and other employees. The Manager has nominal power to hire and fire at will, but any decision may be questioned and overturned by joint vote of the Board and the Employee Members. In order to call into question a hiring or firing decision, a Member of the cooperative must write a letter to the President of the Board of Directors, who must address the issue at the next Board meeting, causing a vote to be cast on the matter before the following Board meeting. While a hiring or firing decision is in question, the employee in dispute may retain all employee benefits that they had previously purchased or earned, including profit rebates and voting rights, but the employee will not be scheduled to work in any capacity for the cooperative without the Manager’s express permission until the hiring or firing question has been resolved.
Shares and Multi-Stakeholder Participation
Qualifying Shares
Every person or company that wishes to vote in cooperative ballots or receive cooperative profit rebates must purchase one share of identical value to all other shares. As of January 1st, 2012, the value of one share is $100.00, and that value will increase or decrease every year on the first day of the year, at the same inflation rate as prevalent in the United States of America in relation to the original date. Only one share may be owned by one company or individual, but one share may be held in common by several individuals (as in, a family or business). One share holds the right to cast a single ballot in cooperative votes. A Member of one type may not hold a membership in the cooperative of another type; for example, a Producer may not also hold a Consumer Membership. Shares must be paid in full before the Member votes or receives profit rebates.
Terms of Payment
The term of payment for qualifying shares is cash at the moment a member is admitted, or before voting rights are exercised or profit rebates are received;
or
The member’s qualifying shares are payable as one-tenth of the price of a Membership at the moment of admission as a member, with the balance being paid at the Member’s discretion until the price has been paid in full. The Member will not receive voting rights or profit rebates until the Membership price has been paid in full.
Transfer of Shares
A Membership share may only be transferred after the Board’s approval following a written request by the assignor, or to a family member upon the death of the assignor. The transmission of Membership Shares takes place by simple transcription in the register or in the membership files.
Redemption of Membership Shares
Members who wish to leave the cooperative may redeem their shares for the current price of membership.
Shares Held in Trust
The value of all Members’ shares will be held in an interest-bearing account until such time as the individual Member wishes to redeem their share. The value of these shares will be held as untouchable and not a part of the cooperative’s financial plan, except insofar as the interest earned on the account each year will be added to the total profits earned by the cooperative that year. In this way, Members are not only assured that they may leave the cooperative at any time and that funds will be present so that the cooperative may purchase the share back from the Member, but Members will experience a return on their investment in the price of the share, in the form of an increased profit rebate each year.
Rebate of Profit
1. The cooperative’s Board of Directors may vote to use a portion of each year’s profits to reinvigorate the cooperative, and/or give a portion of profits to charity; after these portions are removed, every Member type is entitled to reimbursement of the cooperative’s remaining profits in a percentage of total profits equal to the percentage of total sales that represents sales which were made in that calendar year to the Member or from the Member, such that: if a Producer was paid $300.00 for food sold to the cooperative, and a Consumer paid $300.00 for food bought from the cooperative, they both receive an identical percentage of the cooperative’s profits as a rebate. Worker Members are also given a rebate based on the percentage that their take-home wages represent of total revenues in and out; that percentage is the same percentage of the cooperative’s profit that they receive in rebates.
2. Taxes (including payroll and income taxes on Worker Members) paid to the government will be represented in no Member category, and are therefore omitted as a part of total revenues in and out when calculating Member profit rebates.
3. Although no Member may maintain membership in more than one Membership type, every Member receives a rebate based on their participation in each type of commerce, so that if a Member pays $300.00 for produce but also sells $300.00-worth of produce to the cooperative, they receive a rebate of profits equal to the percentage that $600.00 represents of the total gross business conducted by the cooperative in the same year.
4. Members who volunteer for the cooperative receive a rebate of profits based on the minimum-wage value of the hours that they contributed. Paid employees may not volunteer for the cooperative.
5. This plan for rebate of profit is predicated on the idea that consumers are not the only Members who contribute cash value to the cooperative. Everyone (including farmers and employees) deserve to share in the profits that they have worked to create for the cooperative, regardless of how much they choose to purchase from the cooperative – and so this plan is not based merely on the visible contributions of consumers, but the actual gross exchange of worth throughout the cooperative.
Conditions of Membership
1. Admission to Membership
To become a member of the co-operative a person or a company must:
A. purchase one share at the current rate
and
B. maintain membership of one type for which they wish to participate in electing a Board member; for example, if a Member wishes to vote on which Worker Member is elected to the Board, they must meet the minimum requirements to be a Member of that type. If a Member who has purchased a share does not qualify for any particular type of membership, their Membership lapses to Consumer status until they have satisfied the criteria of a membership type that they wish to join. Membership in any particular category is not mandatory; for example, an employee may choose to be a Producer Member, if they wish to do so and meet Producer requirements. All Member categories receive the benefits of any Member category in which they contribute; it is only the choice of which Member type representative that they wish to vote for that should guide their decision to be in a particular category.
2. Maintenance of Rights
The Board is authorized to suspend a membership or revoke a membership if the member’s actions in relation to the cooperative are contrary to the cooperative’s objectives. In the case of a suspended membership, the Member may not vote in cooperative issues or elections until their suspension has been resolved. A suspended or revoked Member will retain all rebate privileges previously earned, but during their suspension or after their revocation they may not add to their profit rebate percentage by working for, volunteering for, buying from, or selling to the cooperative. In the case of a revoked membership, the cooperative will reimburse the ex-member for their membership share at the current rate. Reinstatement of the membership of a suspended or revoked member must be voted upon by the Board. Revoked members’ names will remain on file with the Manager so that their Membership will be called into question if they should ever wish to become members again.