The Strange Life of John Menard
A lurid legal suit against him is the latest chapter in the retail billionaire’s bizarre life.
Nowadays, John Menard has become infamous for the titillating legal case filed against the then 73-year-old business man whom Forbes magazine rates as the world’s 16th wealthiest man, with a net worth of $10.9 billion. The suit accuses the Menard’s hardware chain owner 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.
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 owns more than 280 home-improvement stores in 14 states and the company he started from scratch is based in Eau Claire, WI. His high-handed manner of running the company was detailed in a 2007 feature story for Milwaukee Magazine written by Mary Van de Kamp Nohl that I edited. 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, former managers said. 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.”
A copy of the employment agreement for managers was leaked to Bill Lueders and The Progressive magazine: it stipulates that “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.”
The employee who leaked the contract said the agreement is required for all management staff, Lueders wrote, and added that the threat was effective: ‘The mere mention of the word ‘union’ is a workplace taboo.’”
The National Labor Relations Board, in response to the Progressive story, found that Menards committed multiple violations of federal labor law. The NLRB found merit to five of the eight complaints. It determined that the clause threatening a 60 percent cut in pay for a manager who lets a union be established was a violation, but took no action, as Menard’s has already removed this language from the agreements. But the NLRB also found Menards was violating labor law by requiring employees to sign arbitration agreements that preclude them from engaging in concerted activities, including class action suits. The ruling could require the rewriting of employments agreements with all of its 45,000 employees.
Menard was a major donor to an anti-union program run by the Koch-funded Americans for Prosperity and is also among the donors who’ve given at least $1 million to the Koch Brothers, according to Mother Jones, to help supports its conservative and anti-union causes.
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.
But Menard has seen an end to such enforcement actions since Republican Wisconsin Gov. Scott Walker was elected. Menard, according to Michael Isikoff, chief investigative correspondent for Yahoo News, “wrote more than $1.5 million in checks” to the conservative Wisconsin Club for Growth (run by the ever-busy Eric O’Keefe), which spent generously on ads supporting Walker, helping him survive a 2012 recall election.
In the two years since that donation, Isikoff reported, “Menard’s company has been awarded up to $1.8 million in special tax credits from a state economic development corporation that Walker chairs,” the Wisconsin Economic Development Corp. “And in his five years in office, Walker’s appointees have sharply scaled back enforcement actions by the state Department of Natural Resources — a top Menard priority.”
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. The case is expected to go to trial in April 2016. Expect plenty of reporters to cover it.