Thu Apr 28, 2016 5:54 pm
It’s not just a long-rumored threat, it’s a promise put in writing.
The employment agreement for managers at Menards, the home-improvement giant, imposes a substantial cut in pay should the workers under their supervision form a union.
A section of the employment agreement titled “Union Activity” sets forth: “The Manager’s income shall 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. If a union wins an election during this time, your income will automatically be reduced by sixty percent (60%).”
A copy of one such agreement signed in 2015 was obtained by The Progressive magazine. The clause calling on managers to be punished for union successes appears as Appendix J to the agreement. Newly hired managers are asked to initial every page. The agreement also specifies that managers “may be terminated at any time for any or no reason, with or without cause.”
The contract was provided by a management employee who asked not to be identified for fear of repercussions. The employee said the agreement is required for all management staff, adding that the threat was effective: “The mere mention of the word ‘union’ is a workplace taboo.”
Jeff Abbott, a spokesman for Menards, asked that questions about the agreement be submitted in writing, only to issue a terse response: “Employment agreements are confidential. Thank you.”
Menards, founded and headquartered in Eau Claire, Wisconsin, has more than 280 stores in fourteen states, according to its website. The company ranked 39th on Forbes’ 2015 list of “America’s Largest Private Companies,” with an estimated $8.7 billion in annual revenue and 42,000 employees.
Last March, investigative reporter Michael Isikoff reported that company owner John Menard Jr. secretly funneled more than $1.5 million to a political advocacy group working to support Wisconsin Governor Scott Walker. The article noted that Menards was subsequently awarded up to $1.8 million in special tax credits from the scandal-plagued Wisconsin Economic Development Corp., which Walker then chaired.
John Menard’s antipathy to unions is well-known. In a 2007 article in Milwaukee Magazine, a former store manager said he was made to attend “a one-and-one-half-day seminar in Eau Claire about fighting unions.” The article also quoted an ex-manager in Iowa saying that company policy included a 60 percent pay cut for managers should a store become unionized.
A 2003 Forbes article stated that a provision to this effect was part of a “contract” between Menards and a former manager who sued the chain for age discrimination. Other publications have referred to the 60 percent pay cut as a “threat.” The document obtained by The Progressive shows this language is included in employment agreements with management-level employees.
“Shame on Menards,” said Stephanie Bloomingdale, secretary-treasurer of the Wisconsin AFL-CIO, reacting to the employment agreement. “How are working people supposed to get ahead in this economy and work for a strong America when billionaires like John Menard are rigging the deck before working people even have a chance?”
Jessica Kahanek, a spokeswoman for the National Labor Relations Board, declined to comment on whether threatening managers with a pay cut if workers unionize constituted an unfair labor practice, saying “a case with a similar fact pattern could come before the Board at some time in the future.”
The National Labor Relations Act, to which Kahanek directed a reporter, makes it illegal to threaten “employees,” not managers, over union activity. But it would be illegal if a manager, in seeking to avoid a pay cut, employed threats or coercion against employees.
Carin Clauss, an emeritus professor of law at the University of Wisconsin-Madison who served as U.S. Solicitor of Labor from 1977 to 1981, believes the company might be vulnerable if a complaint were to be filed with the NLRB. The law, she notes, says an employer may not “interfere with, restrain, or coerce employees” in the exercise of their rights to form a union and, in her opinion, “you can interfere with employees by threatening a third party.”
Commenting without knowing the identity of the company, Clauss called the pay-cut threat “an outrageous practice” that she hoped would draw a complaint. “If I were the general counsel for NLRB, I would hope someone would file a charge so the board could take a position,” she said.
Clauss also suggested an agreement that threatened managers with consequences if they “don’t do something to interfere with employees’ organizing rights” could be deemed contrary to public policy and therefore void and unenforceable.
Harris Freeman, an expert in labor law at Western New England University's School of Law, said that even if threatening to cut the pay of managers is not an actionable violation, it is arguably “a pernicious practice” that could exacerbate workplace tensions. “What this encourages,” he said, “is for supervisors to not in any way identify with employees’ shared concerns.”
Bill Lueders is Associate Editor for The Progressive magazine.
Menard Inc. violates labor laws, National Labor Relations Board says
⏲April 01, 2016
By Rick Romell of the Journal Sentinel
Menard Inc. is violating federal labor law in the way it treats its employees, the staff of the National Labor Relations Board has found.
The Eau Claire-based home-improvement retailer has been improperly requiring employees to sign mandatory-arbitration agreements, and has withheld merit pay raises for workers engaged in protected activities, according to the regional office of the NLRB.
"This is very important," said Seth Goldstein, a union official who filed a complaint with the NLRB about Menard's practices. "It will affect over 46,000 employees."
Goldstein is senior business representative with a New York-based local of the Office & Professional Employees International Union.
He filed his complaint after The Progressive magazine reported in December that Menard's agreements with managers called for their income to automatically be cut by 60% if a union won an election at their operation. The magazine reported that a Menard's management employee had provided it with a copy of one such agreement from 2015.
A week later, a Menard spokesman told Bloomberg News that 2016 contracts with managers do not contain such language. The spokesman didn't respond when asked if the company had previously maintained the anti-union practice.
In a summary of the initial decision, sent to Goldstein this week by the NLRB office in Milwaukee, an agency field examiner said Menard has rescinded the policy.
Other, existing practices at Menard, however, must be changed, the summary said.
Among them is the company's policy of requiring nonmanagerial workers, as a condition of employment, to sign agreements that require them to use arbitration and bar them from engaging in joint activities such as class actions.
Menard also must rescind language that prohibits merit raises for employees based on behavior that could involve protected union activity, the summary from the NLRB regional office said.
Those decisions aren't final. If Menard doesn't agree to make the changes, the NLRB likely would issue a formal complaint that the company could contest, Goldstein said.
The officer in charge of the NLRB's office in Milwaukee said Friday that the agency cannot discuss the case at this point.
A Menard spokeswoman said the company would not comment on the matter because it is still pending.
Menard, which operates 287 stores in 14 states, employs more than 45,000 people, according to its website.
The National Labor Relations Board, in response to complaints prompted by an article in The Progressive, has found that the home improvement giant Menards committed multiple violations of federal labor law.
“The employer has maintained unlawful and overly broad written agreements with managers and supervisors,” as well as “unlawful and overly broad provisions in its employee handbook,” the NLRB determined, according to a notice emailed on March 28 to Seth Goldstein, senior business representative of the Office and Employees International Union, Local 153, based in New York City. The notice was sent by Jessica Gibson, a Milwaukee-based NLRB field examiner.
Goldstein filed numerous complaints against Menards after reading The Progressive’s December 8 article on how the company’s written agreement with management staff included a specific threat to slash their pay if the work areas they supervise opt to unionize. Prior news accounts had made reference to this threat, but The Progressive article included the actual clause from an agreement signed in 2015, provided to the magazine by a management employee.
The NLRB found merit to five of Goldstein’s eight complaints. It determined that the company’s written pledge to cut managers’ pay by 60 percent in the event of a successful union operation was a violation, but took no action, as the company has already removed this language from the agreements.
Gibson, in an earlier email to Goldstein, said Menards “had every managerial employee subject to that provision sign a document confirming that change to the employment agreement, along with some other changes.”
Gibson’s March 28 email to Goldstein said the NLRB also agreed that Menards violated labor law in sections of its agreements with employees that deal with the use of confidential information, and by including language that prohibits merit pay increases to employees who engage in “protected concerted and/or union activities.”
Menards will be directed to revise and reissue its employee handbook to address these concerns, Gibson’s email said.
Finally, the NLRB agreed Menards was violating labor law by requiring employees to sign arbitration agreements that preclude them from engaging in concerted activities, including class actions.
“It’s a major victory, because the board is going to issue perhaps a national finding against Menards,” Goldstein said. “It’s wide-ranging.” He says the arbitration rule finding is especially important, as it could require the rewriting of employments agreements with all of its 45,000 employees. The company, according to its website, operates more than 280 stores in fourteen states.
Two of Goldstein’s complaints were found to have merit only in part, and three were rejected outright, including his claim that Menards has actually refused to provide merit pay determinations to employees who engaged in protected activities.
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. Goldstein finds it “ironic” that Menard, a proponent of freedom for government regulation, would be “engaging in this type of unlawful conduct.”
“If he wants the government to respect his rights,” Goldstein said, “he has to respect the rights of employees to speak out on their conditions of employment.”
A spokeswoman for Menards, asked whether the company planned to comply with the requested changes or contest them, responded: "We are unable to comment on pending litigation."
Fri Apr 29, 2016 3:52 am