Legal Ethics

Citing Public Policy, Wis. High Court Bars Reinstatement of Fired Menards Lawyer

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The Wisconsin Supreme Court has ruled 4-3 that the Menards home-improvement chain is not required to reinstate the company’s top in-house lawyer who was fired after complaining about her pay.

The court ruled today that an arbitration decision requiring the company to reinstate Dawn Sands violates public policy, according to the Associated Press and The arbitrator had also required the company to pay $1.78 million, which included Sands’ attorney fees. The court remanded for a new determination of damages.

Menards had argued that the attorney-client relationship between Menard and Sands has been so irretrievably damaged that the arbitration panel exceeded its authority by ordering reinstatement. Sands herself had sought two years front pay during the arbitration and had argued that reinstatement would be inappropriate.

The majority opinion by Justice Michael Gableman acknowledged the argument. Gableman said lawyers owe a fiduciary duty to their clients, and Sands would violate that duty if she accepted reinstatement.

“We cannot countenance an award that forces an attorney to represent a client when it is clear that the complete disintegration of mutual goodwill, trust, and loyalty renders ethical representation by that attorney impossible,” Gableman wrote.

According to the opinion (PDF), Menards founder John Menard had hired Sands in 1988 when he was dating her sister. Sands’ duties were to assess and oversee the in-house legal department, including its general counsel, and to act as a public spokesperson. She adopted the title of executive general counsel. Months later, the GC was fired, and Sands took over his duties.

The fired general counsel had earned a salary of nearly $105,000 plus a bonus; Sands was paid an hourly rate that came to about $56,000 a year, not including overtime. After two years, her hourly rate was increased to an amount totaling about $64,000 a year. She never received another raise, despite repeated requests, the opinion said.

Sands had alleged John Menard had informed her of her firing, telling her, “I want your ass out of here,” and raising his fist when she tried to log off her computer.

In briefs submitted to the arbitration panel, Sands had said John Menard’s conduct was “so monstrous and reprehensible that it shocks the conscience” and that he is a “reckless, callous actor who care[s] nothing about anyone else’s rights or reputation.”

Prior coverage:

ABA “Company Won’t Reinstate In-House Lawyer; How Much Will That Add to $1.6M Award?”

Updated at 12:40 p.m. to link to previous coverage.

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