Lowe’s is Forcing Store Managers to Sign Arbitration Agreements
Lowe’s is now forcing its salaried managers and assistant managers to enter binding arbitration agreements if they want to receive their bonuses. By signing the contract, managers agree they won’t take Lowe’s to court with any claims or join in class action lawsuits against the company. Instead, any potential dispute would be handled individually and taken to an arbitrator rather than brought before the court.
The contract, dated March 2018, states, “Your participation in the 2018 Manager Bonus Program” hinges on the signature, as well as “your continued employment at Lowe’s.” This leaves little room to opt against signing, forcing them to go along with the new protocol.
Internal emails associated with the initiation of the contract also revealed a human resources officer instructing a manager to submit the signed contract if the manager wants a bonus. It is unclear whether hourly employees are being asked to sign as well, or if anyone has been terminated for refusing to provide a signature.
The bonuses for Lowe’s store managers are based largely on store performance and can be worth several thousand dollars. The bonuses are a key piece of manager-level compensation and one of the main reasons store managers put up with the long hours and lack of overtime pay that often comes with working a position in the retail industry.
“The bonus is why I work the 55-hour weeks,” said one manager wishing to remain anonymous. Of the arbitration agreement, the person said, “I gain nothing with this.”
According to online records, it is not uncommon for store managers to make nearly $90,000 each year including an average bonus of $30,000. Thus, losing out on the bonus would be losing out on a third of the manager’s pay.
What’s more, workers at Lowe’s and other retailers have indicated their employers classify them as managers in order to exempt the company from offering them minimum wage and overtime pay as outlined in the Fair Labor Standards Act. Thus, many managers have had to pursue back wages in court. Signing an arbitration agreement would disallow them from doing so moving forward.
Lowe’s has been sued in the past for allegedly misclassifying workers as managers, so they could work well beyond 40 hours a week without overtime pay. In 2014, the company agreed to a $9.5 million settlement for a group of human resources managers for doing just that.
Although such arbitration agreements are described as voluntary, threatening to withdraw pay or even terminate an employee for not signing seems quite to the contrary. This is a way of forcing managers to sign rather than asking them to.
Class action lawsuits also provide additional powers and protections that individuals approaching an arbitrator aren’t afforded, and often, employees are fearful of doing so, anyway, because even if the outcome is favorable, it may mean blacklisting them for future opportunities within the organization.
The Lowe’s contract specifically states, “you and Lowe’s agree that any controversy between you and Lowe’s arising out of your employment or the termination of your employment shall be settled by binding arbitration.” It also notes that employee will have to pay a $150 filing fee if his or she wishes to take the company to arbitration.