Menards, the home improvement giant, has agreed to a settlement with federal labor officials to remove language from its employment agreements that were alleged to violate employee rights.
The settlement agreement with the National Labor Relations Board requires Menards to post a notice to employees that it will respect their rights under federal labor law and “not condone or tolerate any conduct by our agents/representatives which does not comply” with the settlement terms.
The NLRB investigation was prompted by a series of complaints filed by Seth Goldstein, a senior business representative of the Office and Employees International Union, Local 153, based in New York City.
“I’m ecstatic,” said Goldstein about the settlement, signed Wednesday. “It’s historic.” He credits Marissa McDermott, from the McDermott Law Office in Highland, Indiana, for her work on the matter.
Goldstein was prompted by The Progressive magazine’s December 8 article reporting that Menards’ employment agreement with managers called for their pay to be “automatically reduced by sixty percent (60%) of what it would have been if a union of any type is recognized within your particular operation during the term of this Agreement.”
The company announced within a week that this language would be be part of its 2016 employment agreements. The NLRB, in a summary of its findings released in late March, agreed that this language violated federal labor law but said no further action was necessary given that the company had “already rescinded” this language. According to an email to Goldstein from Jessica Gibson, a Milwaukee-based NLRB field examiner, the company “had every managerial employee subject to that provision sign a document confirming that change to the employment agreement, along with some other changes.”
The NLRB also found merit to several additional complaints lodged by Goldstein, while dismissing others. It found that Menards violated labor law in sections of its agreements with employees dealing with the use of confidential information, and by prohibiting merit pay increases to employees who engage in “protected concerted and/or union activities.”
Most significantly, according to Goldstein, the agency agreed that Menards was violating labor law by requiring employees to sign agreements that preclude them from engaging in concerted activities, including class actions.
“I don’t know of any large corporation that has agreed to take out class action waivers from their agreements,” Goldstein said, noting that the NLRB’s past efforts to require this have met with opposition from large employers in dozens of cases. “This is the first case that a company has been compelled to take it out.”
Menards, according to its website, operates more than 280 stores in fourteen states.
The settlement agreement requires Menards to revise and reissue its employee handbook and contracts with managers to address these concerns. And it requires the company to pledge to its 45,000 workers that it will not engage in certain activities that were flagged in the complaints. These include:
- “WE WILL NOT, in the Merit Pay Eligibility Notice or any other document, indicate that you may be denied a merit pay increase for having a "Questionable Attitude" or because you ‘Gossip.’ ”
- “WE WILL NOT tell you in employment agreements/arbitration agreements or in any other documents that you must first bring any problems, claims, and disputes related to your employment to your supervisor as explained in the Team Member Relations section of the Team Member Information Booklets.”
- “WE WILL NOT maintain a mandatory arbitration program that our employees reasonably would believe bars or restricts their right to file charges with the National Labor Relations Board.”
- WE WILL NOT maintain and/or enforce a mandatory arbitration program which requires our employees, as a condition of employment, to waive the right to maintain class or collective actions in all forums, whether arbitral or judicial.”
- “WE WILL remove the references in the employee agreements/arbitration agreements to ‘personnel,’ ‘management’ and ‘operations’ being considered confidential information which cannot be disclosed.”
Menards spokesperson Jessie O'Mara, asked if the company violated the rights of its workers until it was forced to stop doing so by the federal government, replied via email: "We will not be commenting at this time."
Company owner John Menard is a significant contributor to Republican candidates and, according to a report last year by journalist Michael Isikoff, secretly funneled more than $1.5 million to a political advocacy group working to support Wisconsin Governor Scott Walker.
In early April, Menards announced that it was delaying the construction of a new store in New Philadelphia, Ohio, pending the outcome of the 2016 presidential election. Spokesperson O’Mara told the local paper that the company was feeling too anxious to proceed.
“We are a family owned business and with the Obama Administration scaring the dickens out of all family businesses in the U.S.A at present and with no certainty if the next administration will be any better, we have decided not to risk expansion until things are more settled,” O’Mara wrote in an email to the newspaper.
Bill Lueders is associate editor of The Progressive.