Opportunities for ESOP abuse are plentiful, and most workers aren't sophisticated or organized enough to do anything about it. Experts say more employees should consider asking managements to organize an employee stock ownership plan if a change of control is possible or imminent.
"Both union and non-union workers should carefully evaluate the possibility of an ownership change, realizing that their job security depends as much on that as any other aspect of their work life," said Joseph R. Blasi, management professor at Cal Poly San Luis Obispo.
If your company is a subsidiary of a larger corporation and is profitable, and you are a union member, consider asking that your union bargain for inclusion in its contract a right of first refusal to purchase the company, Blasi suggested. If you are not in a union, form a workers' committee to ask to be considered as an equal bidder if the unit is put up for sale.
If your company is having financial or labor problems, consider a feasibility study to determine whether the reasons for failure are reversible through an ESOP and changes in work rules and compensation. These studies can be done in a day or so by an experienced ESOP expert, who can be found by referral from the National Center for Employee Ownership (415-272-9461).