December 9, 2015
Menards cuts store managers’ pay if unions form
It’s long been said that workers don’t quit companies; they quit managers. So, does it follow that if workers at a store decide to form a union, the store manager should pay? The answer if you run a Menards, according to a report by The Progressive, quite literally, appears to be "yes."
The magazine published a section of the employment agreement for Menards under the title of Union Activity that threatens punitive action should a store become organized.
"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%)."
The threat of a 60 percent pay cut, according to The Progressive and The Capital Times, is not news to those in Menards’ home state. The publications reference other reports that have cited the policy going back to 2003.
Source: menards.com
While many non-unionized retailers are known for their aggressive efforts to thwart organizing activity at their stores and distribution centers, the clause in the Menards agreement suggests it may be putting managers in a position in which they would feel the need to take extraordinary steps to keep a union out.
The National Labor Relations Act makes it illegal to threaten workers of union activity. But the legal question is whether companies, in essence, are doing roughly the same thing by threatening the wages of managers who may then feel compelled to take actions that would interfere with the rights of workers to organize.
BrainTrust
Cathy Hotka
Principal, Cathy Hotka & Associates
Kevin Graff
President, Graff Retail
Recent Discussions
Discussion Questions
Do you think managers should be forced to take a pay cut or face other financial penalties from their employer if their stores are unionized? Do you think the Menards employment clause is unusual among retail companies that do not have a unionized workforce?
Poll
Pardon my ignorance about Menards’ labor practices, but wouldn’t their policies be consistent from location to location? So if employees are incentivized to unionize (based on working conditions, etc.), isn’t this in the hands of corporate management rather than individual store managers to do something about it? If Menards wants to remain non-union, it certainly has that right but ought to reconsider putting the onus on an individual store manager. After all, those managers are responsible for a lot more than keeping out labor unions in their everyday work.
What a stupid and unethical way to treat a store manager. I am shocked that a company of this size would make this their policy. It starts at the top, and they should be the ones responsible for dealing with the threat of unions, not the store managers as they have a lot on their plate. Simply put, horrible.
No, not at all. It sounds more like Menards managers need a union based on this article. It is not only unusual to have such a clause but I am sure it is illegal in many states.
I doubt this is real and Menards just does this for shock effect. This is to send a message to frontline workers that Menards is serious about being non-union. Perhaps in some cases a manager should take the blame. Most likely if a union formed on a manager’s watch he would be fired, however a 60 percent pay cut is basically the same as getting fired. I do know people who work for Menards and if you have ever belonged to a union in the past, it’s very difficult to get hired. Yes, this clause is unusual but my guess would be all the managers are in the know that it’s just there to show how serious Menards is about being non-union.
Organized labor has long faced opposition from management, including Henry Ford’s goon squads. This, though, has to be a new low … penalizing store managers, whose job it is to enforce corporate policy, when workers can’t make a living wage. That means firing someone not for cause, but for whim. Shameful.
Nope. Block the unions in retail — they only cause prices to rise and cut the quality of the services delivered via store teams. The price of unionized labor to build a car is way too high. For the skill set needed for U.S. born cars and the price we pay for that skill set it is just unfair to car buyers. Want the same mess in retail? Ford had no goons. They had a business and were trying to protect the prices promised to the American people.
If this is the way Menards’ management thinks, it is no wonder the workers want to unionize.
Tells you what the culture is in one clear statement. Does it really differ from Walmart’s stance? Does it really differ from the way most retailers think and act? Nice clear message.
I’ve been a member of three unions in my life because I had to be as a condition of employment. I did not like any of them because I felt they killed initiative and coddled slackers. It’s a no-brainer that as a store manager at Menards, I would feel encouraged to engage in activities that interfere with worker rights to unionize. Having said that, I disagree strongly with the employment clause set forth by Menards. It is unfair to managers and it suggests a draconian management style that encourages unions in the first place.
Reading this article makes me believe I got caught in some time warp on the way to the office … and it’s now 1948! Seriously, who is running that place? There are a lot of other great retailers out there looking for great store managers, so Menards’ managers should dust off their resumes and find an employer that deserves them.
I’m sure the managers at Menards knew what they were getting into when they took the job. This stipulation is a bit tough but if you want to work and in this instance, be employed by Menards, then you understand and abide by their policies.
Unions are the last thing Menards needs if they are to compete. Menards’ ownership from on top has always been heavy handed. Deal with it.
This violates the National Labor Relations Act. If this is truly in writing Menards will likely find themselves in court shortly.
Disgusting. Well-paid blue-collar shoppers built Menards. At the end of the day it won’t matter if Sally in lighting makes an extra $2 an hour and has six weeks paid maternity leave. It will matter if Sam the warehouse worker can’t afford to buy a new screen door because his wages haven’t risen in eight years.
Unions are a touchy — and political! — topic. But lets put it in the context of incentives in general. Good incentives reward people for the behavior you want. Bad incentives either create bad behavior, or they reward (or penalize) people for things that are out of their control. The question here is, do Menards store managers have enough direct control over the working conditions that might inspire workers to feel like they need a union to protect themselves?
If the answer is no, then this is a stupid policy that someday is likely to get Menards sued over store managers’ desperate and possibly illegal actions. If the answer is yes, then as someone contemplating a store manager job at Menards, you better think hard about whether you have the skill set to keep workers happy enough that they feel no need to unionize, because otherwise you’re taking on a big risk.
In this day and age of store management, it is rare to find a retail environment where a store manager has that much discretion. Which leads to the next question: what other bad/risky/irrational behavior might Menards be incentivizing?
If it’s true, it is no doubt both unusual and feels unethical and illegal as well. While I won’t get into the basic “are unions good or bad” discussion that is playing out, chances are that an organizing campaign will be largely the result of company policy, and to a lesser (but still important) extent local management practices. If the checks and balances on a store manager’s performance and behavior are so out to lunch that a store manager’s practices and behavior with staff are not understood and reviewed on an ongoing basis by the next levels of management, shame on the entire organization, not just that manager.
No, but I think the CEO and BOD — assuming they’re compensated — should. Most sources of dissatisfaction of workers are going to come from decisions made at the top.
You may not agree with the clause that Menards chooses to include in their employment agreement with their managers. That’s okay. You and Menards can agree that you will not have an employment relationship.
Managers clearly know and understand expectations at Menards. Those managers then set clear expectations for their associates. Both are key reasons for the the outstanding success that Menards has had with their stores and the growth of their business.
Retailers too often have failing stores due to lack of leadership. Menards is proactively taking the position that they will develop leadership, and then ask those leaders to drive their stores with programs that help customers, help associates, and help shareholders achieve each of their expectations.
As well-stated by others here, no, I don’t think the managers should face penalties. However if managers have financial “skin” if stores unionize, e.g. profit sharing, then of course they would have incentive to help ownership to thwart union efforts.
The bigger story here seems to be the revelation of such a pay cut clause! This joins the ones companies already have such as “at-will employment” and “mandatory arbitration.” Such legalese inserted into employment contracts has been the way for companies to skirt long-standing labor laws (whether union or not) that protect workers of any ilk from unscrupulous practices by company owners. These clauses have shifted the pendulum back to management’s favor/advantage.
It wouldn’t be surprising if such clauses are in many other workplaces because no employer would publicize such things.
Retailers who espouse “family” and other such company values to attract customers, tout themselves as a great place to work AND practice what they preach usually don’t need to worry about unionization. Look at Costco or Stew Leonards as examples. When ownership has happy employees who enjoy their work environment and have the opportunity to earn a decent living wage such a workforce WANTS to work hard and TAKES PRIDE in their company so that customers shop, shop, shop till they drop. Then all stakeholders, management, shareholders and employees, are thrilled as well.
I believe that companies whose priority is to squeeze every penny of profit for the benefit of management and shareholders ahead of everything else, including at the expense of their workforce, are short-sighted. Said another way, companies that face unionization need to look in the mirror and figure out where they’re falling short to be in such a position with their employees.
Unscrupulous and greedy management is as bad for business today as they were back in the day which led to the modern labor movement. Just as companies must work hard to create, foster and sustain a great environment for customers and employees as part of a solid business plan, unions (where they exist) must also be current with regard to workplace rules and results orientation. Bad workers can’t be tolerated and good employees, whether union or not, know this.
Maybe Menards needs a good consultant from among the commentators here to identify workplace improvements that actually has a chance to prevent unionization both in the short and long term, and ironically they can probably get such insights from their local store managers. Positive reinforcement usually works better than negative!
It is most common for the big box companies to structure the stores as wholly owned subsidiaries that are standalone and apart from the holding companies. This assembly of loopholes is why unions must convert each store and if done, the store will almost certainly close down and reopen down the road.
A look at the typical store manager income packages will reveal that substantial portions are tied to performance bonus plans. It is not uncommon for the store manager bonus package to be affected by associate salaries and overtime. This is something a unionized workforce would seek to increase in their benefit. When that happens, a large portion of the bonus, which is now counted on as manager income, goes out the window. The standalone salary is not enough to keep these men and women in a position that requires 70+ hours a week, with travel time.
Generally I’m not a huge fan of unions, but if true, this is just wrong on a number of different levels. Clearly, anyone facing such a penalty would likely be looking for new employment. Then would they try to hire new management at the reduced rate? And what caliber of manager are they going to get for that rate of pay.
A smarter way to approach it is to give a lower base pay with performance based annual bonus. If the forming of a union resulted in the store not meeting their financial goals, then the manager would be paid less. If they unionized and he or she was a strong manager who still made their financial objectives they would not be penalized.
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Pardon my ignorance about Menards’ labor practices, but wouldn’t their policies be consistent from location to location? So if employees are incentivized to unionize (based on working conditions, etc.), isn’t this in the hands of corporate management rather than individual store managers to do something about it? If Menards wants to remain non-union, it certainly has that right but ought to reconsider putting the onus on an individual store manager. After all, those managers are responsible for a lot more than keeping out labor unions in their everyday work.
What a stupid and unethical way to treat a store manager. I am shocked that a company of this size would make this their policy. It starts at the top, and they should be the ones responsible for dealing with the threat of unions, not the store managers as they have a lot on their plate. Simply put, horrible.
No, not at all. It sounds more like Menards managers need a union based on this article. It is not only unusual to have such a clause but I am sure it is illegal in many states.
I doubt this is real and Menards just does this for shock effect. This is to send a message to frontline workers that Menards is serious about being non-union. Perhaps in some cases a manager should take the blame. Most likely if a union formed on a manager’s watch he would be fired, however a 60 percent pay cut is basically the same as getting fired. I do know people who work for Menards and if you have ever belonged to a union in the past, it’s very difficult to get hired. Yes, this clause is unusual but my guess would be all the managers are in the know that it’s just there to show how serious Menards is about being non-union.
Organized labor has long faced opposition from management, including Henry Ford’s goon squads. This, though, has to be a new low … penalizing store managers, whose job it is to enforce corporate policy, when workers can’t make a living wage. That means firing someone not for cause, but for whim. Shameful.
Nope. Block the unions in retail — they only cause prices to rise and cut the quality of the services delivered via store teams. The price of unionized labor to build a car is way too high. For the skill set needed for U.S. born cars and the price we pay for that skill set it is just unfair to car buyers. Want the same mess in retail? Ford had no goons. They had a business and were trying to protect the prices promised to the American people.
If this is the way Menards’ management thinks, it is no wonder the workers want to unionize.
Tells you what the culture is in one clear statement. Does it really differ from Walmart’s stance? Does it really differ from the way most retailers think and act? Nice clear message.
I’ve been a member of three unions in my life because I had to be as a condition of employment. I did not like any of them because I felt they killed initiative and coddled slackers. It’s a no-brainer that as a store manager at Menards, I would feel encouraged to engage in activities that interfere with worker rights to unionize. Having said that, I disagree strongly with the employment clause set forth by Menards. It is unfair to managers and it suggests a draconian management style that encourages unions in the first place.
Reading this article makes me believe I got caught in some time warp on the way to the office … and it’s now 1948! Seriously, who is running that place? There are a lot of other great retailers out there looking for great store managers, so Menards’ managers should dust off their resumes and find an employer that deserves them.
I’m sure the managers at Menards knew what they were getting into when they took the job. This stipulation is a bit tough but if you want to work and in this instance, be employed by Menards, then you understand and abide by their policies.
Unions are the last thing Menards needs if they are to compete. Menards’ ownership from on top has always been heavy handed. Deal with it.
This violates the National Labor Relations Act. If this is truly in writing Menards will likely find themselves in court shortly.
Disgusting. Well-paid blue-collar shoppers built Menards. At the end of the day it won’t matter if Sally in lighting makes an extra $2 an hour and has six weeks paid maternity leave. It will matter if Sam the warehouse worker can’t afford to buy a new screen door because his wages haven’t risen in eight years.
Unions are a touchy — and political! — topic. But lets put it in the context of incentives in general. Good incentives reward people for the behavior you want. Bad incentives either create bad behavior, or they reward (or penalize) people for things that are out of their control. The question here is, do Menards store managers have enough direct control over the working conditions that might inspire workers to feel like they need a union to protect themselves?
If the answer is no, then this is a stupid policy that someday is likely to get Menards sued over store managers’ desperate and possibly illegal actions. If the answer is yes, then as someone contemplating a store manager job at Menards, you better think hard about whether you have the skill set to keep workers happy enough that they feel no need to unionize, because otherwise you’re taking on a big risk.
In this day and age of store management, it is rare to find a retail environment where a store manager has that much discretion. Which leads to the next question: what other bad/risky/irrational behavior might Menards be incentivizing?
If it’s true, it is no doubt both unusual and feels unethical and illegal as well. While I won’t get into the basic “are unions good or bad” discussion that is playing out, chances are that an organizing campaign will be largely the result of company policy, and to a lesser (but still important) extent local management practices. If the checks and balances on a store manager’s performance and behavior are so out to lunch that a store manager’s practices and behavior with staff are not understood and reviewed on an ongoing basis by the next levels of management, shame on the entire organization, not just that manager.
No, but I think the CEO and BOD — assuming they’re compensated — should. Most sources of dissatisfaction of workers are going to come from decisions made at the top.
You may not agree with the clause that Menards chooses to include in their employment agreement with their managers. That’s okay. You and Menards can agree that you will not have an employment relationship.
Managers clearly know and understand expectations at Menards. Those managers then set clear expectations for their associates. Both are key reasons for the the outstanding success that Menards has had with their stores and the growth of their business.
Retailers too often have failing stores due to lack of leadership. Menards is proactively taking the position that they will develop leadership, and then ask those leaders to drive their stores with programs that help customers, help associates, and help shareholders achieve each of their expectations.
As well-stated by others here, no, I don’t think the managers should face penalties. However if managers have financial “skin” if stores unionize, e.g. profit sharing, then of course they would have incentive to help ownership to thwart union efforts.
The bigger story here seems to be the revelation of such a pay cut clause! This joins the ones companies already have such as “at-will employment” and “mandatory arbitration.” Such legalese inserted into employment contracts has been the way for companies to skirt long-standing labor laws (whether union or not) that protect workers of any ilk from unscrupulous practices by company owners. These clauses have shifted the pendulum back to management’s favor/advantage.
It wouldn’t be surprising if such clauses are in many other workplaces because no employer would publicize such things.
Retailers who espouse “family” and other such company values to attract customers, tout themselves as a great place to work AND practice what they preach usually don’t need to worry about unionization. Look at Costco or Stew Leonards as examples. When ownership has happy employees who enjoy their work environment and have the opportunity to earn a decent living wage such a workforce WANTS to work hard and TAKES PRIDE in their company so that customers shop, shop, shop till they drop. Then all stakeholders, management, shareholders and employees, are thrilled as well.
I believe that companies whose priority is to squeeze every penny of profit for the benefit of management and shareholders ahead of everything else, including at the expense of their workforce, are short-sighted. Said another way, companies that face unionization need to look in the mirror and figure out where they’re falling short to be in such a position with their employees.
Unscrupulous and greedy management is as bad for business today as they were back in the day which led to the modern labor movement. Just as companies must work hard to create, foster and sustain a great environment for customers and employees as part of a solid business plan, unions (where they exist) must also be current with regard to workplace rules and results orientation. Bad workers can’t be tolerated and good employees, whether union or not, know this.
Maybe Menards needs a good consultant from among the commentators here to identify workplace improvements that actually has a chance to prevent unionization both in the short and long term, and ironically they can probably get such insights from their local store managers. Positive reinforcement usually works better than negative!
It is most common for the big box companies to structure the stores as wholly owned subsidiaries that are standalone and apart from the holding companies. This assembly of loopholes is why unions must convert each store and if done, the store will almost certainly close down and reopen down the road.
A look at the typical store manager income packages will reveal that substantial portions are tied to performance bonus plans. It is not uncommon for the store manager bonus package to be affected by associate salaries and overtime. This is something a unionized workforce would seek to increase in their benefit. When that happens, a large portion of the bonus, which is now counted on as manager income, goes out the window. The standalone salary is not enough to keep these men and women in a position that requires 70+ hours a week, with travel time.
Generally I’m not a huge fan of unions, but if true, this is just wrong on a number of different levels. Clearly, anyone facing such a penalty would likely be looking for new employment. Then would they try to hire new management at the reduced rate? And what caliber of manager are they going to get for that rate of pay.
A smarter way to approach it is to give a lower base pay with performance based annual bonus. If the forming of a union resulted in the store not meeting their financial goals, then the manager would be paid less. If they unionized and he or she was a strong manager who still made their financial objectives they would not be penalized.