In many respects, Circus Cooperative Cafe feels like any small coffee shop. The classics are all there: bags of coffee beans, pastries in a display case, customers on couches sipping tea. After a first glance, however, small details – from the pro-labor artwork decorating the turquoise walls to the tofu-on-sourdough sandwich named for Vietnamese revolutionary Ngô Văn – hint at a difference. This cafe is owned by its workers, who run the business cooperatively.
With “An Act promoting entrepreneurship through employee ownership” making its way through the Massachusetts House and Senate, Circus may be in the vanguard of a trend.
Running Circus as a worker-owned cooperative was always the plan for its four founding worker-owners, all once staff at Darwin’s, a Cambridge coffee chain. Darwin’s employees unionized in November 2021 – about a year before owners Steven and Isabel Darwin announced the chain would close all four of its locations. Circus opened as a worker cooperative in September 2023 in one of its former spaces at 31 Putnam Ave., Riverside. It still serves some Darwin’s items.
“The thing for me about being in a union was always about being able to have some control and some say in the workplace,” said May Nerudova, one of Circus’s founding worker-owners. “My goal was for us as workers to be able to do that sort of thing and for us to be able to have a say over a place where we spend a third of our lives – sometimes even more.”
“It seemed like a logical step that if we were going to do it ourselves, we might as well have decision-making power all the way through,” fellow founding worker-owner Caleb Zedek said.
The co-op structure is differentiated from that of a traditional business by its models of ownership, wages and decision-making.
For the most part, Circus hires people who want to become worker-owners and will stick around for at least a year after reaching worker-owner status, which they can do after a minimum of six months; this is achieved through a vote after the employee has been trained for both roles.
Some people like the transient nature of traditionally run cafes, but it can lead to instability, Zedek said. The co-op structure at Circus works against that transience.
“It’s a big commitment from us. It’s a big commitment from them,” Zedek said.
Workers and worker-owners get the same wage at Circus, which is not the case at all worker cooperatives, Zedek said.
Profit-sharing and decision-making
The cafe also uses the patronage model of profit-sharing, which Zedek said is the standard among worker cooperatives. Under this model, Circus splits end-of-year business profits into collective business profit, which stays in the business, and individual profit. Some of that individual profit is distributed to workers in a percentage determined by the hours they put in. Some goes into an individual capital account and is sent to worker-owners through a set payout plan.
Democratic decision-making also characterizes Circus’s cooperative approach to business, with employees coming to a consensus about decisions ranging from new menu items to the use of collective profit. “I’m a big fan of the idea that democracy belongs in a lot more places in society,” Nerudova said. “A cooperative is an outgrowth of that.”
“We are able to define our values in this project collectively,” Zedek said. “We might have disagreements as those conversations are happening or as people’s personal interests [and] needs change, [but] the bottom line is we are explicitly doing this project together, which means that if we’re paying attention to what our goals are … everyone’s on the same team.”
Complications and challenges
When the cafe opened and had fewer staff members, decision-making was streamlined; most weekends, all workers were present and could contribute to decisions. Since it began to add staff, disparity has grown between new hires’ and original employees’ knowledge of how the shop works. There has been an effort to make decision-making more transparent to lessen this disparity, the worker-owners said.
If he had to structure Circus again, he would do more to prepare for the complications of expanding staff, Zedek said, “but I am very proud of what we’ve got.”
Despite the challenges of adding to the team, bringing an employee into worker-ownership was “a big moment,” Zedek said. “We are doing something that people are excited about and interested in.”
Other exciting moments for Circus’ cooperative structure – those that Zedek described as feeling “most inspiring” – come when people from outside the cafe reach out for advice on starting a worker cooperative or navigating an issue that has surfaced in their existing employee-owned business. “It’s rare, but it’s special,” Zedek said.
Union background
Darwin’s employees unionized for a wage increase and paid time off, among other demands. Though the Darwins gave the union voluntary recognition, “negotiations had not progressed in the ways that people might have wanted – which, of course they didn’t, because things always don’t progress according to expectations,” Zedek said.
The way Circus’ worker-owners see it, worker cooperatives achieve similar goals more directly than unionization.
“Fundamentally the union-boss relationship is antagonistic,” said Zedek, who emphasized that he still supports unions and their goals. For workers, “the relationship is explicitly, ‘We want more of whatever profit this business is earning.’ And I understand, for better or for worse, why business owners might be unhappy about that.”
In cooperatives, workers have power over their wages and conditions of employment and do not need to negotiate with a boss to do so, Zedek said.
A larger trend
If passed, the pair of employee-ownership bills now on Beacon Hill would support businesses such as Circus by encouraging small-business owners to transfer ownership to workers.
The bills would give qualified employee groups a 30-day right of first refusal for buying a business and require that workers be told that employee ownership of the business is an option. They would grant owners selling to employees an exemption on capital gains taxes for the sale’s first $1 million and stipulate that preexisting union or collective bargaining agreements must remain when the business comes under new ownership. As of early June, the only sponsors were Democrats.
Massachusetts lawmakers have demonstrated support for employee ownership in the past; in 2022, they created the Massachusetts Center for Employee Ownership, which tells business owners about worker cooperatives and gives grants to support employee ownership. The city of Cambridge has an information session on employee buyouts and successions planned for June 24.
The Circus team is aware of a handful of co-ops like them, such as at New Leaf Espresso in Somerville, Cafe Reynard in Malden and Democracy Brewing in Boston, Small local businesses could close en masse in coming years as the “silver tsunami” of baby boomers who own businesses retire, Western Massachusetts News reported. This phenomenon has prompted requests for lawmakers to incentivize employee ownership.
“I hope there are more”
“Historically, local small businesses don’t actually get passed along for a wide variety of reasons,” Zedek said. Employee ownership is a good way to see that happen and for workers “to be able to continue doing something that they know and keep local economies strong. The money stays in town, the tax base stays in town.”
Zedek said he wished he knew about worker ownership before the Darwins shut down their shops. Turning existing businesses into worker cooperatives presents a possibility for the turnover to be collaborative, allows owners to step aside with something to show for the work they put into the business and lets employees keep their jobs, Zedek said.
“This is a way for business owners and workers to move forward into more equitable structures,” Nerudova said. “I think it should be considered by both parties.”
“I hope we and other cooperative organizations can inspire people to think of [worker ownership] as an option,” Zedek added. “I hope there are more cooperatives.”
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