We, the Red Emma’s Bookstore*Coffeehouse, a worker-owned and operated bookstore and coffeehouse dedicated to providing resources for education and activism, are committed to working to provide ideas, inspiration and entertainment for the critical and the curious reader. We offer the community a distinctive range of books and printed material as well as internet access, and offer a progressive social forum for people with diverse interests and backgrounds. Red Emma’s will provide an outlet for independent art and culture. Red Emma’s will also provide customers with a unique and comfortable environment for enjoying great coffee, specialty beverages, and bakery items at a reasonable price. Red Emma’s is a non-hierarchical collective that seeks to provide a model for organizations we would like to see in the society we envision.
Functions and Objectives
- The Collective shall provide the public with educational and informational materials.
- Red Emma’s will make available socially responsible food and beverages.
- Without limiting in any way its objectives, purposes, or powers,
this body shall also be authorized, and have the power to:
- promote and provide a medium whereby workers may act together, collectively and cooperatively, towards the creation of productive and non-alienating work for the benefit of its members and the public;
- promote the economic welfare of its members and the public through the collective ownership of production, distribution, and administration tools;
- engage in any business or activity which shall serve the economic, educational, and cultural welfare of its members and the public;
- advance the workers’ cooperative movement as an economic system; and to join, or otherwise associate itself with other cooperative societies locally and around the world for the purpose of mutual aid and the creation of a cooperative society;
- Red Emma’s LLC, hereafter “Red Emma’s”: the legal organization registered as a limited liability company in Maryland.
- Collective: the group of people who have become members of Red Emma’s.
- Non-member employee: someone who works for Red Emma’s, but is not a member of Red Emma’s.
- Collective member: A member of Red Emma's.
- Prospective collective member: A non-member employee whom the Collective is considering as a potential future collective member.
- Attendance: physical presence at a meeting, or participation via phone or other audio/video/live-chat channel.
- The bylaws stated here shall also serve as the official operating agreement for Red Emma’s.
- Amendments to the bylaws shall be made in accordance with the procedure for major decisions stipulated in the Meetings Section.
Assets of Red Emma’s
- All assets of Red Emma’s will be legally held by Red Emma’s. All debts of Red Emma’s will be legally in the name of the Red Emma’s.
- Individual members of the Red Emma’s shall not be held liable as individuals for those obligations of Red Emma’s, whether arising in contract, tort or otherwise solely by reason of being a member of Red Emma’s.
- If the Collective should choose to dissolve Red Emma’s, the assets of Red Emma’s will first be used to pay off any outstanding debts incurred by Red Emma’s. The disposition of any remaining assets will be decided on in accordance with the procedure for major decisions stipulated in the Meetings Section.
- A court of competent jurisdiction shall not order the foreclosure of the economic interest of the worker-member subject to a charging order and order the sale of the economic interest of the debtor. This section shall supersede Section 4A-607(c)(3) of the Maryland Limited Liability Company Act.
All management decisions for Red Emma's are to be made by the Collective in accordance with the decision making structure outlined in this document.
The Collective will meet in a timely and regular fashion.
Members must remember that they have a responsibility to attend meetings of the Collective on a regular basis.
Full Collective meetings take place on the first Monday of each month, starting at 6:30PM.
The Collective will meet quarterly to discuss budgeting and the overall financial situation of the business.
Any decision to be made that affects the bylaws, membership, mission, formation and dissolution of committees, location or time of regular meetings, or any other major decision must be made during a meeting in which at least two-thirds of the membership is present. Such decisions will be announced a week in advance. Emergency meetings can be called with two thirds of the Collective present.
All other decisions must be made at a meeting where at least one half of the collective membership is in attendance.
In the event that the meeting does not yield a consensus on an issue, a vote may be made where at least three-fourths of the collective members present must agree.
- Quorum is calculated from the number of collective members that have actively participated in at least one general meeting in the four weeks preceding the decision or are in attendance at the meeting for which quorum is being calculated.
- Individual members can exempt themselves from quorum without going on a leave of absence by communicating this to the collective. (That is to say, if an active member knows that a decision will need to be made at a meeting and fears that her/his absence might undermine quorum, that member can inform the collective that her/his absence should not be counted against quorum.)
- Collective members must remember that they have a responsibility to attend meetings of the Collective on a regular basis.
Absence from meetings and decision-making
- There will be no proxy voting.
- If a member, who has attended at least 2 of the previous 4 general meetings, is not able to attend a meeting where major decisions are being made, the member is encouraged to either exempt themselves from quorum or strongly request that the collective postpone the decision until the member can participate.
Any person is eligible to become a member of this Collective, provided the following conditions are met:
Collective Membership is voluntary, and is based on approval by the existing Collective. Prospective members must agree to work within the existing by-laws of the Collective.
All Red Emma’s Collective documents, meetings, and meeting notes, and other operating agreements are open to scrutiny by any Collective member.
The prospective member must fulfill the following requirements before the Collective may decide on admission:
- The prospective member must join The Industrial Workers of the World, or whatever union currently represents the workers.
- The prospective member must receive training in the store’s operation during this period.
- The prospective member shall agree to follow the terms of this document, and the Red Emma’s Workers Handbook.
Collective members shall:
- Actively contribute to production, administration or operations of the Collective.
- Attend, or make a good faith effort to attend, monthly full collective meetings.
- Be committed to collective process, including, but not limited to consensus-based decision-making and the maintaining of an egalitarian work place.
- Operate the coffeehouse and bookstore in a manner that serves to support the maintenance of existing Collective projects.
- Maintain a community space that provides educational material and events in accordance with the goals of the Collective.
- Work a minimum number of hours of 20 hours per month in one of the Collective’s projects.
Every active worker-owner at Red Emma’s is an equal member of the LLC, with an equal voice in the business. Departments determine who counts as active, but the Collective/LLC as a whole can override these determinations. Good faith attendance at monthly full-collective meetings will be a prerequisite of active membership.
A member may take a leave of absence from the collective during which time the above responsibilities and privileges shall not remain in force. Upon reinstatement by the Collective, the member’s responsibilities and privileges resume.
Collective members which meet the above requirements are termed active members. Collective members who do not meet the above requirements(to be reviewed on a quarterly basis) are to be considered inactive members. An inactive member loses the ability to block decisions, to count against quorum, and to participate in voting, but still retains access to the store, is welcome at closed meetings of the collective, and counts as a “full collective member” for the purposes of scheduling. Inactive members may be reinstated as active by the decision of the Collective.
Any member may be expelled by the membership for deliberate or repeated conduct deemed by the membership to be detrimental to the Collective. The member to be expelled must be present at the meeting where the expulsion is decided, and shall have an opportunity to dispute the charges. While the collective member’s membership is in question, the Collective may suspend the rights of the member in question to work, volunteer, vote, and act as or claim to be a member of the Collective until said member attends a meeting. An expelled member may appeal expulsion. Such appeal shall be voted on by the membership, following an opportunity for the expelled member to be heard, orally or in writing, at the meeting.
The Collective maintains the right to hold individual collective members, prospective collective members, or other non-member employees personally liable for financial losses or damage to assets deemed by the Collective to have resulted from grossly negligent or malicious behavior on the part of said individuals. Such a decision falls under the procedure for “major decisions” in section 2.2.
As business capital, the members acknowledge that the money in their capital account is at risk; in particular, other creditors external to the LLC may have claims on the assets of the LLC whose priority is greater than the claims of members. At the same time, the principle of limited liability insures that no member will be, at any time, liable for more than what they have invested in their member capital account.
Members determined to be inactive can—and should—leave their capital share of the business in the hands of the LLC if they intend to become active again.
- When a new member is added to the LLC, that member will contribute member capital in the amount of $1,000 . This equity remains the property of the member, and forms the basis of their member capital account.
- If a member is not able to or would prefer not to invest the $1,000 share immediately, the LLC will advance the member a loan equal to that amount, with zero interest, to be repaid by a minimum automatic deduction of 50 cents/hour from their pay, with no fixed term of repayment, such that a full-time, 40 hr/week worker-owner and LLC member will have repaid said loan in 50 weeks. Members may also pay a portion of their $1,000 share up front, and pay the remaining funds through an automatic deduction.
- Member shares represent an important commitment to the LLC and a sign of personal investment in the workplace and in the mission of the LLC. As such, the contribution of this $1,000 share is distinct from any retained earnings allocated to the member.
A member’s capital account represents the amount of investment made by the member in the business. It is money that belongs to them, but which they are allowing the business to use.
An amount equal to no less than one quarter of the total amount of member capital, in cash or other liquid assets, will, barring exceptional circumstances, be retained on hand by the LLC.
The amount recorded in a member capital account grows when:
- The member “buys their share” in the LLC.
- The member is allocated a patronage refund at the end of the fiscal year, and the LLC, operating on a cooperative basis, retains up to 80% of this refund as allowed by law, recording this retention in the member’s capital account.
- The member makes a loan of personal capital to the LLC.
- The member elects to have a portion of their wages retained by the LLC .
The amount recorded in a member capital account decreases when:
- The LLC elects to pay back a loan of personal capital made by the member.
- The member elects to receive back wages they have previously elected to retain in their capital account.
- The LLC elects to distribute some portion of retained patronage refunds.
- The LLC allocates, at the end of the fiscal year, a member’s share of any loss incurred in that year, in proportion to the member’s share of the total held in all capital accounts. The LLC has the option of whether such allocations reduce the current balance in the member’s account, or merely reduce any future allocations of profit. Additionally, the capital corresponding to a) member shares and b) any loans from the member to LLC should not be reduced by a share of operating losses.
The member decides to take a cash distribution against the balance of their capital account. Such distributions to must not exceed a total of $500 to a given LLC member in a given calendar year, and must not result in a balance of less than $1,000 in the member's capital account.
Records of member capital accounts will be available on a quarterly basis for inspection by all active members of the LLC.
Loans to collective members
- Members may choose to borrow against their member capital account, with the total amount advanced in this fashion not to exceed 1/2 of the recorded balance. Such loans must be approved by the LLC before being dispersed. Loans to members in other amounts, or against other assets of the LLC, are strongly discouraged.
Member capital and departing members
Upon a voluntary or involuntary exit from the LLC, the member will receive the amount accumulated in their capital account, less any outstanding debts of the member to the LLC, and less any damages incurred by the LLC and directly attributable, as determined by the LLC, to the actions of the member. Such payment will be made by the LLC no more than six months after their relationship with the LLC has been severed. The exact schedule of repayment is to be determined by the LLC.
Members exiting voluntarily from the LLC may elect to leave the balance of their capital account with the LLC through the end of the fiscal year, with the LLC paying said balance back up to six months after the end of that fiscal year, in order to remain eligible for any shares of profit or loss to be allocated at the end of the fiscal year, as specified in 7.1 below. Members who choose to request the balance of their capital account upon their departure from the project and not at the end of the fiscal year, and members whose departure from the project is not voluntary, are not eligible to receive allocations of profit and loss at the end of the fiscal year in which they departed.
Allocation of profit and loss
- All profit will be passed through for tax purposes to LLC members in proportion to the amount of hours worked in the previous fiscal year. All loss will be passed through for tax purposes to LLC members in proportion to the share of the total capital accounts held by the member.
The Red Emma’s minimum wage is $11/hr. “Base wages” will be defined as the Red Emma’s “minimum” wage rate/hour, plus 50% of any additional hourly wage. “Surplus wages” will be defined as the remaining 50%.
Base wages will be paid every two weeks in a timely fashion. Surplus wages will be paid on a quarterly basis, but only after a determination by the LLC that the business was and will continue to be sufficiently profitable to make this distribution of wages to members a wise decision.
The hourly wage rate will, at the discretion of the LLC, and on an annual basis, be adjusted upwards , when the LL elects to:
- raise the base wage of every worker-owner
- establish a raise for current and future worker-owners based on the length of time they have been members of the LLC
- establish a raise for current and future worker-owners based on the total number of hours they have worked to date
However, at no point is the LLC allowed to raise wages such that the difference between the highest paid and lowest paid member exceeds a 2:1 ratio.
Additionally, the LLC may elect to give one-time bonuses to all members, either in equal amounts or based on the amount of hours worked in a given period. Such bonuses should reflect anticipated surpluses, but do not need to wait for the final determination of profit/loss at the end of the fiscal year. Such bonuses should be treated, for tax purposes, as extra wages.
In the event that the business enters a period of temporary financial distress, Red Emma’s worker-owners have the option of allowing their wages to accumulate in their capital accounts, rather than being distributed to them in cash. It is encouraged that no wages retained in this way remain in the member’s capital account for any period longer than one year.
Hiring takes place either:
- When a department cannot fill allocated hours from within the current collective
- When a department receives an allocation of additional paid hours from the full collective at a quarterly budgeting meeting, or in exceptional circumstances, at a monthly meeting.
The hiring process will be as follows:
The department forms a hiring committee
The department can solicit applicants in whatever way makes sense to them. This could be very informal, or involve a publicly advertised position
After narrowing down the candidates to people who they feel should get an interview:
- The names of those candidates are circulated to the full collective; there is a three day window before any interview can take place in case someone has a blocking concern
- A person from outside the hiring department, selected by the advisory council, joins the hiring committee and takes part in the interviews and selection of person to be hired.
Once a candidate has been selected:
- The candidate can start paid work immediately in a probationary period, as an employee of Red Emma's.
- After at least 1 month + 20 hrs of work, after a departmental review, the new hire is interviewed by the full collective at a monthly collective meeting.
- If the full collective approves the hire, they become a prospective collective member. A prospective collective member remains an employee of Red Emma's, but may enjoy additional privileges and responsibilities as outlined elsewhere in these by-laws.
After three months:
- There is another departmental review.
After six months as a prospective collective member:
- After a final departmental review, the full collective reviews the new hire, and if there are no blocking concerns, the prospective member is added to the LLC as a member and becomes a collective member.
If either the department or the full collective determines the new hire is not ready for collective membership at six months, the process may be extended for up to an additional six months, with a final review at both levels necessary before become a member of the LLC and collective.
All reviews are recorded and kept on file, and are geared to provide a standardized formula for evaluation.
The existence of scheduled reviews by a department or the full collective do not preclude termination for gross incompetence or malicious behavior.
Department- vs. Collective-level Firing
- Firing may be initiated at the department level or at the collective level. Firing is initiated at the department level in instances of incompetence, unprofessionalism, or general “bad fit”.
- Firing at the collective level is reserved for behavior sufficiently transgressive or destructive that it substantially impacts members of departments other than the department of the worker in the firing process.
Department level firing:
- Departments are mandated to develop written internal standards for competence and professionalism specific to the work of the department and make these standards available to collective members and new hires. It is the role of the department to assess if a department member is adhering to these standards.
- Departments will develop internal procedures for initiating firing and providing process to department members. No worker will be fired by a department without first being given the opportunity to discuss specific problems in their performance with the department. The intent of these discussions is to help the worker in question to improve their performance.
- As an intermediate step or an alternative to firing, departments may establish special benchmarks for individual workers meant to re-establish confidence in the good faith and/or competence of the department member . Departments are encouraged to develop a routine performance review process for department members.
- Notes from any firing procedures, as well performance reviews, and the details of any special benchmarks set for workers must be stored in a file in the Red Emma’s office and be available to any members of the collective. All of these documents must be reviewed and signed by the department members participating in the process including the worker under review, and the member under review is invited to attach their own explanatory notes . In the instance of firing due to consistent lateness or absence for shifts, individual instances of lateness or absence must be documented.
- It is the policy of Red Emma’s that workers will not work in the store while intoxicated and repeated breach of this policy may result in firing.
- A workeer who is alleged by another worker to have performed one of the following acts is banned from the store immediately and until an emergency closed collective meeting can be held: sexual or other physical assault on a collective member or other space-user, theft or malicious destruction of collective property or property on the premises, clandestine collaboration with law enforcement or intelligence services, and illegally using or distributing drugs in or around the store. Failure to observe this ban will result in firing.
- The purpose of the emergency meeting is to determine the factual circumstances of the event and the appropriate collective response up to and including firing and banning.
- All decisions at these emergency meetings are treated as major decisions.
- Other forms of obnoxious, harassing, or abusive behavior will be addressed through the Red Emma’s grievance procedure, with firing as a possible outcome.
Logistics of Firing:
- A collective member who no longer has membership in any department due to firing will be treated for all other purposes like a collective member who has voluntarily left the collective.
- When a worker is fired at the collective level, all issues related to keys, passwords, and the disbursement of shares will be determined by the collective on a case-by-case basis.
Employees who are not collective members
As necessary, departments may decide to hire workers who do not intend to become members of the collective, pursuant to the approval of the collective as stipulated in “Hiring”
Because we value a democratic workplace, such workers are understood to either be filling a temporary need that is limited in duration, or contributing in a strictly delimited part-time manner to the operations of the business. Non collective members should either:
- Work one year or less in the project or
- Work eight hours or less per week, averaged on a quarterly basis, in the project
Workers exceeding the limitations above should be considered for collective membership, and should not remain employed if they exceed the above limits but the collective declines to extend an offer of membership.
Because we value an egalitarian workplace, such workers shall not be paid an hourly wage less than the lowest paid member of the collective.
The day-to-day work of the collective shall be carried out by the following departments:
- Food Department
- Books department (Books, Periodicals, Zines, Ephemera, Shwag, Tabling co-ordination, Course texts, online ordering)
- Programming and publicity department
- Infrastructure department (Tech, facility, financial recordkeeping, accounting, and tax/regulatory compliance)
Departments will meet regularly, and will be responsible for assigning tasks to their members.
- Collective members and prospective collective members can present grievances against individuals or the Collective as a whole to the Collective during regular meetings. Such grievances will be considered priority agenda items.
- If the intent of presenting a grievance is to seek mediation or intervention from the Collective in redress of the grievance, it should be treated as a major decision as outlined in section 2.2.
- It is within the rights of the person presenting a grievance to request that the meeting (or portion of a meeting) in which the grievance will be aired be closed to all but full collective members. If the grievance involves individual collective members or prospective members, the individuals airing the grievance may request that the meeting (or relevant portion of the meeting) be closed to the individuals against whom the grievance was made. These individuals also have the right to request that they have an opportunity to meet with the Collective without the presence of the individuals who originally brought forth the grievance. No decisions may be made by the collective regarding the grievance without both parties involved being given the opportunity to return to the meeting.
- If a meeting has been closed in accordance with 6.3, the collective can decide to reopen the meeting in order to pursue resolution/redress or to continue discussing the grievance.
- The collective may seek outside mediation if it is unable to successfully resolve a grievance.
Advisory Council (proposed language, general direction agreed on in 2013)
- The advisory council is made up of a minimum of 1 and a maximum of 2 members from each department, who agree to serve a minimum term of one year, and who must have been a collective member for at least a year before becoming part of the council.
- Individual departments make selection of delegates to the advisory council according to whatever procedure and norms they feel are most appropriate, with the assumption that people who want to serve on the council should have that opportunity within a reasonable amount of time.
- The advisory council is required to meet monthly, and attendance is mandatory for members.
- The advisory council is tasked with keeping an eye on the overall situation of the project, especially but not exclusively relating to financial matters.
- The advisory council helps prepare budgeting proposals for quarterly meetings.
- The advisory council is not a decision making body.
- Membership on the advisory council may (but is not required to) be a compensated position given the expectations that work outside of meetings may be required in order to make informed decisions.
- The advisory council is required to take minutes of all meetings and make those available to the collective.
Relationship of the Red Emma’s Collective to Red Emma’s LLC
- Membership in the LLC is subject in all cases to the decisions of
the Collective taken in accordance with the stipulations of this
document, with the specific consequences that:
- Membership in the LLC is not transferable, except by the consent of the Collective.
- New members of the LLC will in all cases be Collective members, and their admission to the LLC will be subject to the approval of the Collective.
- Membership in the LLC does not grant said members any right to dispose of or lay claim to the assets of the LLC except as stipulated by the decisions of the Collective.
- Members of the LLC, by signing these By-Laws, waive any rights they may have as LLC-members which conflict with the stipulations on said rights as outlined here, and waive the right to exercise any rights as LLC members which are not specifically limited here without the approval of the Collective.
On November 18, 2012, the formerly unincorporated project known as Thread Coffee became a part of the Red Emma’s project. Members of the Thread Project at that time became members of the Red Emma’s LLC, but not formally members of the Red Emma’s Collective as specified in the other provisions of these by-laws. While the two collectives are working towards a more formalized integration of operations and governance, the following interim measures currently govern the operations of larger cooperative enterprise:
- Rights and responsibilities for the operation of the coffee roasting business remain internal to Thread’s own democractic governance policies
- Members of Thread retain possession of and ownership of their current coffee roasting equipment as their share of the business assets, and can make no claims on the assets of the cafe/bookstore. Likewise, members of Red Emma’s collectively own equal shares of the assets of the cafe and bookstore, and do not own at this time any share in the coffee roasting assets contributed to the LLC by Thread upon entry. Future assets may be allocated in different ways.
- While the business operations of both projects are to be reported to the IRS and relevant state authorities as a single entity, each project will continue at this point to maintain its own financial records. Members of one project are entitled to view the records of the other project upon request.
- As becoming a member of either project means becoming a part of a larger cooperatively-structured LLC, membership decisions are subject to approval by both collectives.
- As a cooperative, allocation of surplus earnings are to be allocated on the basis of patronage, measured in this case by the number of hours worked. While Thread’s internal compensation for labor performed may differ from the compensation received for working at Red Emma’s, surplus allocations take part across the entire larger cooperative based on hours worked. In order to make this possible, Thread will keep records of hours worked.