Labor Law Obstacles to the Collective Negotiation and Implementation of Employee Stock Ownership Plans: A Response to Henry Hansmann and Other 'Survivalists'

Abstract:     
On a theoretical level, employee ownership may result in significant advantages for firm performance over conventional investor ownership. Evidence reveals, however, fewer employee owned firms than such theories would suggest, resulting from either overly optimistic or misguided theories, or from other factors that may limit the number of employee owned firms. The “survivalist” critique, as argued most notably by Professor Henry Hansmann, suggests that this paucity of employee-owned firms is evidence of their inefficiency relative to investor-owned firms. This Article contends that labor law may be a limiting factor that creates obstacles to the implementation of employee ownership and control; therefore, labor law may be a reason for the relatively low number of plans, not the inefficiencies cited by the “survivalist” critique.

Number of Pages in PDF File: 69

Keywords: union, labor, ESOP, labor

JEL Classification: J5, J51, J54, J59

Accepted Paper Series