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Antioch Law Journal

Article Title

Eminent Domain as a Tool to Set Up Employee-Owned Businesses in the Face of Shutdowns

Authors

Keith J. Smith

Abstract

In recent years there has been a tremendous increase in the number of worker-owned businesses, with more than 2,000 in existence today.'Studies show that part of the reason for this increase is their success: employee-owned businesses are more productive, 2 create more jobs,3 and grow faster than comparable non-employee owned companies.4 One factor that has contributed to the growth of worker-owned businesses has been plant shutdowns. Today corporations are able to relocate around the world in order to maximize profits.5 As a result, the Northeast and the Midwest alone lost an estimated 900,000 jobs during the 1970s from plant shutdowns.6 A plant closing can have a devastating impact on a town or city. However, communities confronted by this situation are not helpless. The doctrine of eminent domain is a legal tool that can be used by communities to address the issue of plant closings while facilitating the creation of worker-owned businesses. In this Comment I will demonstrate that the use of eminent domain to appropriate a business being shutdown so that it can be sold to its employees is an historically justified and intellectually sound exercise of statutorily authorized governmentpower.This Comment focuses primarily on the doctrine of eminent domain in Massachusetts for four reasons: first, eminent domain has been seriously considered in Massachusetts as a tool to prevent plant shutdowns. Second, the economic development statutes presently in existence in Massachusetts authorize the use of eminent domain in this fashion.8 Third, the use of eminent domain to facilitate an employee-owned business is primarily a state law question because the authority to use eminent domain arises under the state constitution,9 and the underlying public use that justifies the exercise of eminent domain aids the local economies.'0 Fourth, state courts are becoming more active.