As a result of Judge Cherry’s decision, Payne’s complaint will now go back to the NLRB, which has added further charges and claims made by other Menards employees. The specifics of this case involve a former Menards clerk, Janet Payne, who believes that the arbitration condition forced upon her violated her rights under the Americans with Disabilities Act, the Age Discrimination in Employment Act, and Indiana state law.
(The practice of private arbitration has come under growing legal scrutiny, with some arguing that it speeds resolution of disputes and others feeling it tilts the playing field to the corporation being pursued.) Employees must agree to submit all disputes to binding arbitration with the private American Arbitration Association, rather than pursue other legal remedies allowed under federal labor codes.
In order to be hired, Menards requires all potential employees to consent to very specific contract language concerning their rights in the case of any potential future disputes with the employer. And that is where the current case concerning arbitration agreements originated. Menards’ contract language for all its employees – managers or otherwise – then came under closer scrutiny as more and more documents and case studies flooded in. That original NLRB complaint concerning Menards’ practices was quickly amended and expanded into an investigation of other possible NLRB violations. The company made managerial candidates accept in their employment handbook that they would automatically be docked 60 percent of their pay if a union was ever formed under their jurisdiction. The ULP case stemmed from revelations that Menards had instituted an anti-union financial penalty practice when it hired managers. The case was launched by Seth Goldstein, a senior business representative for OPEIU Local 153. The case stems from an Unfair Labor Practices (ULP) charge filed against it in NLRB Region 18, which covers Minnesota, Wisconsin and surrounding states where Menards operates 280 stores. Rather amazingly, given its decades-long record in resisting unions, Menards – owned by billionaire John Menards, a major contributor to right-wing candidates – has never before had to face such NLRB scrutiny.
District Court in Indiana – if you read underneath the confusing legal back-and-forth – leaves it to the NLRB to investigate and determine whether the mandatory arbitration agreement Menards requires its employees to sign steps into “protected concerted activities” deemed constitutional by the NLRB. The action by Magistrate Judge Donald Cherry for the U.S. district court ruled February 18 that the National Labor Relations Board (NLRB) has the power to determine if the corporation’s requirement that employees resolve disputes with the company through binding arbitration is overly broad and restricts their right to remedies under the National Labor Relations Act.Īrbitration agreements have been an ongoing issue for courts involving other corporations, but this is the first time Menards has found itself under the gun. For the first time ever, a federal agency has been granted authority to investigate whether the binding arbitration policy that the Menards home improvement chain forces on its employees is legal.