Bruce Murphy
Murphy’s Law

The Strange Life of John Menard

A lurid legal suit against him is the latest chapter in the retail billionaire’s bizarre life.

By - Jun 20th, 2013 01:22 pm
Sign-up for the Urban Milwaukee daily email
Menards. Photo by Mike Kalasnik.

Menards. Photo by Mike Kalasnik.

Rarely have I read a legal case with more titillating details than the one filed against 73-year-old John Menard, whom Forbes magazine calls the 56th richest American, with a net worth of $7 billion. The suit accuses the retail chain owner based in Eau Claire of “intentional inflection of emotional distress, battery, attempted battery, assault, attempted assault” against Tomisue Hilbert, the wife of Stephen Hilbert, a longtime business associate of Menard’s.

“On multiple occasions,” the suit claims, “Mr. Menard touched Mrs. Hilbert and demanded both directly and indirectly, that Mrs Hilbert engage in sexual activities with him and his spouse.” Menard warned there would be “severe financial consequences” if Tomisue (pronounced Tommy Sue) refused him, the suit contends, and some time after this, “Menard made good on his threats and began an orchestrated campaign to cause severe financial consequences against Mrs. Hilbert.”

Menard’s attorney, Kevin Tyra, denies all the charges.

The case comes not long after another embarrassing suit by Menard’s former legal counsel Dawn Sands, the sister of Menard’s former girlfriend Deb Sands. This case went all the the way to the Wisconsin Supreme Court, which upheld a $1.7 million judgment against Menard for past wages he owed her. Dawn Sands had charged that Menard “is a man without paramenters, no limits, no respect for the law, and obviously, no self-discipline to control or limit his own behavior.”

Menard and Stephen Hilbert were longtime friends who met through their love of auto racing; Hilbert’s company, Conseco, provided $10 million in sponsorship to Menard’s racing team. In 2005 Menard and the Hilberts created MH Equity Private Equity, essentially becoming business partners. Menard had an 80 percent stake, and the Hilberts 20 percent. Stephen was the fund’s president and CEO and his wife was the fund’s managing member.

In those palmy days, the Hilberts hosted Menard and Deb Sands (then his fiance) at their home in St. Martin and at Donald Trump’s estate in Palm Beach, FL. The Hilberts were apparently friends of the Trumps. Donald’s wife Melania Trump had worked closely with New Sunshine, a holding company created by Private Equity to market a line of high-end luxury skin products. Melania appeared on television promoting the product line, which was supposed to be sold in Lord & Taylor stores.

But in February 2013, Menard succeeded in convincing a Wisconsin court to oust Hilbert and turn the equity fund over to him. Menard then sent a letter to the Trump Organization canceling the contract with New Sunshine. Mrs. Trump has filed a $50 million claim for damages against Menard. Donald was apparently so miffed that a few weeks ago he tweeted a column I wrote for Milwaukee Magazine on Menard.

Menard is also in a legal war with Lisa Trudeau, the wife of former Indianapolis Colts quarterback Jack Trudeau. Lisa had worked for Australian Gold, another company managed by Private Equity. Once Menard took it over, she was sued for $1.5 million for breach of contract and fiduciary duties.

But Lisa Trudeau has filed a counterclaim contending Menard fired her in April “because of Mr. Menard’s desire to harm Mr. and Mrs. Hilbert and because Mrs. Trudeau had rebuffed Mr. Menard’s… sexual advances.”

Trudeau is a friend of Tomisue Hilbert, whose suit claims that Menard knew Trudeau well and “had previously groped her breasts and had caused her to dance sandwiched between Mr. Menard and his wife while on the dance floor and had suggested they have sex.” (By this time, Menard had married Fay Obiad, who had replaced Deb Sands as his girlfriend and married Menard in 2008).

As I said, it’s lurid stuff. Tyra told the media Menard “categorically denies the inappropriate conduct Mrs. Hilbert alleges. Ms. Hilbert’s complaint appears to be a reaction to Mr. Menard’s justified actions” (taking over Private Equity).  The Hilberts “mismanaged the assets and resources entrusted to them, and incurred wildly inappropriate expenditures,” Menard has charged through his attorney.

Adding to the weirdness, both Tomisue Hilbert and Lisa Trudeau have the same lawyer, Indianapolis attorney Linda Pence, who told the Indy Star that Menard “has a strange history thinking he can get anything he wants…This man has a well-documented history of disregard for people, particularly women.”

Menard’s high-handed manner of running his home improvement chain was detailed in a 2007 feature story for Milwaukee Magazine written by Mary Van de Kamp Nohl.  The story reported that Menard’s managers had to sign agreements to be personally penalized for things that go wrong. For instance, having 15 carts in the parking lot drew a $10 fine. And the fine was $100 per minute if they opened a store late.

Managers were forbidden from building their own homes, to ensure they couldn’t steal any building materials from Menard’s. And Menard hired private investigators to check whether employees who undertake even minor home-improvement projects were using pilfered supplies.

Menard was aggressively anti-union and had a policy that managers’ pay would be cut by 60 percent if their store became unionized. And all managers had to sign an agreement requiring them to go to arbitration – not the courts – if they had a dispute with the company. “Moreover, they’d have to pay their own attorney’s fees and half the cost of the arbitrator, even if Menards was found at fault,” the story reported.

A columnist for the Minneapolis Star Tribune once described Menards’ manner of handling an employee as “something exhumed from the Bronze Age with all its primitive logic intact.”

Nohl found Menard and his company had more run-ins with state Department of Natural Resources than any other Wisconsin company. Menard and his company were ultimately fined $1.7 million for 21 violations. Menards was fined for disposing hazardous waste in 1994, charged by the Minnesota Attorney General in 2003 with manufacturing and selling arsenic-tainted mulch, fined $2 million in 2005 for having a floor drain that DNR officials believed was dumping chemicals into a tributary of the Chippewa River, and hit with an administrative order from the U.S. Environmental Protection Agency for damaging a stream that ran through its property in South Dakota.

The company extended its string of violations in January 2011, when it was ordered to pay $30,000 in fines and court costs for dumping a pallet of herbicide on a parking island.

Perhaps the classic example of Menard’s style was a 1997 violation, when he was caught using his own pickup truck to haul plastic bags filled with chromium and arsenic-laden wood ash to his own home to dispose in his household garbage.

The incident illustrates Menard’s pinchpenny thriftiness, which Nohl described at length and is echoed in Hilbert’s lawsuit, which claims the billionaire rarely carried cash and his credit cards were often declined. The Hilberts often ended up footing expenses for Menard and his guests, the suit alleges.

Details in a 1998 tax case showed the chief financial officer for Menard’s was then paid just $55,702 while John Menard was pulling in $20.6 million in annual compensation. His general counsel Dawn Sands claimed in her successful suit that she was grossly underpaid and was the victim of gender discrimination. In addition to her claim for $1.78 million in back pay, Sands had asked to be given her job back at Menards, but the state Supreme Court instead referred the case back to a lower court to decide on additional compensation for Sands because “no reasonable person” would want to return to work there, the decision noted.

Hilbert’s suit claims Menard objected to paying his girlfriend Deb Sands $20,000 per month as general counsel for Private Equity and told Mr. Hilbert that “I’m not paying that much to her sister.” Hilbert agreed to reduce Deb Sands pay to $10,000 per month, the suit notes.

After Menard fired Dawn Sands and she sued him, Menard ended his relationship with Deb Sands and insisted that Hilbert fire her, the suit notes.  “Menard claimed that her monthly retainer could be used to help her sister Dawn pay attorneys in the lawsuit against Menard,” and so Mr. Hilbert agreed to terminate Deb Sands, the suit alleges.

Deb Sands has filed her own lawsuit against Menard, claiming she was entitled to a portion of his assets because they had co-habited for almost eight years. In reaction, the suit alleges, “Menard and his lawyers engaged in a scorched earth strategy against her, filing multiple counter-claims and hundreds of motions, resulting in an expensive lawsuit that is now in its fifth year of litigation.”

At least six business associates of the Hilberts have so far been sued by Menard or the companies that Menard took over from them.

Nohl described Menard as a workaholic and lonely man with few friends who was estranged from his children. Hilbert’s suit says Menard told Tomisue that he no longer liked working and was tired of pleasing his customers, and wanted to live his life fully and fulfill his sexual urges. This was during his stay at the Hilbert’s home in St. Martin on Memorial Day weekend in 2011.

On that weekend, Menard “demanded that Mrs. Hilbert join both him and his wife (Ms. Obiad) for sex after her husband went to bed,” according to the lawsuit. Tomisue returned to her bedroom and told her husband of Menard’s advances. “Mr. Hilbert believed that Mr. Menard’s judgment was impaired because of alcohol, that he could not be serious, and he would likely forget about it following a good night’s sleep,” the lawsuit recounts.

But over the next two months, the suit contends, Menard made more requests that Tomisue join him and his wife for sex, including two offers to travel to Wisconsin, all of which she rejected. Menard’s conduct “constitutes an invasion of Mrs. Hilbert’s human dignity and human worth” and has caused her “severe emotional distress,” the suit charges. Expect plenty of reporters if the case goes to trial.

 

 

Categories: Murphy's Law

8 thoughts on “Murphy’s Law: The Strange Life of John Menard”

  1. East Slider says:

    John Menard-Sex Party Machine!!! I especially like the part about how when the woman kept rebuffing his advances for sex with Menard and his wife, he figured that maybe throwing in a free trip to Wisconsin might put him over the top with her! (probably a trip to Eau Claire nonetheless!) Maybe the WI tourism board can work this in somehow to new promotions!

  2. Stacy Moss says:

    I always make sure to keep my breasts at least ten yards away from billionaires.

  3. Karen says:

    Women should refuse to shop at Menards. This guy appears to have no moral compass.

  4. Frank says:

    Seems like somone is out to get Mr. Menard’s money. I don’t think he’s that stupid. I find it funny this was brought up AFTER he fired the Hilberts.

  5. Big Davve says:

    I often have the same reaction as Frank when hearing stories like this, I wonder how much is true and how much is just an attempt to clean some of the excess cash of some rich person’s wallet. Yet, hearing many of these rather crazy stories about Mr. Menard over the years, I’m thinking it might be true this time.

    I’ve known a couple of people who’ve worked as managers for Menards over the years and they’ve told stories that back up much of what’s been written here and in other articles about the rather strange corporate culture they have there, its almost like a cult, where you have to give up so much of your life outside of work for whatever the company wants you to do, or you’re gone! Yes, their managers are paid well compared to other similar positions, but apparently you’re basically owned by the company from that point on and always told how replaceable you are as well. I’m not at all against “giving your all” for an employer and have been called a workaholic myself, but it sounds like much of what goes on behind the scenes at Menards is just plain WEIRD!

  6. Ecnative says:

    Yes it does sound extraordinarily preposterous ! But I can tell you I know lots of people who worked for him, and the strange demands and costs to work there are real. He has an enormous ego, a tremendous sense of entitlement and no regard for humanity, let alone the environment . It’s not really a stretch to think he treated these people like this. Yet, the city (the city council people) of Eau Claire treats him like royalty who can do no wrong. His management style seems eerily similar to the governor .

  7. Dan Armstrong says:

    I remember reading in the Journal Sentinel about the parking lot herbicide dumping incident. I also remember thinking that in terms of his behavior this must be the tip of the iceberg. This article puts the rest of the iceberg in view. Steer clear.

  8. Zach says:

    Good to know all this. I think I will be sticking to FleetFarm or Farm & Fleet for these sort of purchases from now on; I wanted to support a midwest business by shopping at Menards but I can’t justify giving this arsehole any business, ever again – or at least until Menards is sold to someone who turns the place around.

Comments are closed.