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Tuesday, May 03, 2016

Ind. Law - "Labor Complaint At Valparaiso Menards Leads To Company-wide Changes re Arbitration Agreements"

From an April 28th WBAA NPR story by Annie Ropeik:

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.

"While I have in other cases consented to arbitration, I thought that this was an agreement that had to be challenged," McDermott says. * * *

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. * * *

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.

ILB: This appears to be a case where the details of the arbitration agreement were very sparse. In Sgouros v. TransUnion, decided by the 7th Circuit on March 25th, the issue was whether Sgouros had agreed to an online arbitration provision. See this ILB post from March 28th, which links to both a summary of the opinion, and an analysis of the opinion by Prof. Noah Feldman, including:
[Judge Diane Wood] noted first that TransUnion hadn’t ensured that Sgouros would see the “critical” contract language at all. “What cinches the case for Sgouros,” she held, was that TransUnion actively misled consumers.

Posted by Marcia Oddi on May 3, 2016 02:11 PM
Posted to Administrative Law | Ind. (7th Cir.) Decisions | Indiana Law