An employee rights complaint by a former Valparaiso Menards clerk led this week to a labor victory for all 45,000 of the home improvement chain’s workers across the Midwest.
The issue was over mandatory arbitration, which is legal — companies can require employees settle complaints out of court, but they have to make sure employees know what rights they’re giving up.
Lake County attorney Marissa McDermott says her client, Janet Payne, was fired after bringing a doctor’s note to excuse an absence at Menards. The Wisconsin-based company wanted the case thrown out of court, because Payne had signed a document agreeing to arbitration.
But McDermott says that document was really unclear.
“I had never come across an employment agreement that informed the employees so little about what their rights were,” she says.
It didn’t explain that arbitration meant employees couldn’t ask for jury trials or file labor charges, she says, and it didn’t make clear that workers wouldn’t have to pay an arbiter themselves.
I had never come across an employment agreement that informed the employees so little about what their rights were.
“While I have in other cases consented to arbitration, I thought that this was an agreement that had to be challenged,” McDermott says.
The Office and Professional Employees International Union agreed with her. Its lawyers were already fighting Menards on the issue, but hadn’t gotten the case to the federal level. They had also complained to the NLRB about Menards policies threatening managers with a big pay cut if their store unionized, and denying employees pay raises if they talked about unions on the job.
Those manager pay cuts are no longer in effect, after a Progressive Magazine investigation last year, but other policies were ongoing. So McDermott and the union teamed up to bring the issue to an Indiana District Court judge, who asked the NLRB to investigate.
On Wednesday, the NLRB announced it had found parts of the arbitration and pay raise rules were illegal. Menards settled the case, and will change its rules to let workers join class-action suits and file complaints with the NLRB. It’ll also do away with the restrictions on pay raises.
McDermott says Janet Payne’s original case will now be able to proceed in court.
She adds it’s a major victory when Indiana courts have often favored mandatory arbitration in the past, and because “Menards is an outlier in just how far they take their anti-union stance.”
The company has delayed several new stores in recent years, citing concerns about the Obama administration’s labor policies and the upcoming election.
Its founder, billionaire John Menard Jr., has also been a big supporter of pro-business politicians. Last year, Yahoo News reported he secretly gave $1.5 million to a group supporting former GOP presidential candidate and Wisconsin Gov. Scott Walker. Yahoo also reported that Menard Jr. received $1.8 million in tax credits from a development group Walker chaired.