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HUMAN RESOURCES

Sales Are Up. So Are Lawsuits

While successful entrepreneurs are vulnerable to being sued, John Menard, founder of Menard Inc., has faced a steady stream of lawsuits.
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It's hard to believe there was a time when you couldn't get a five-penny nail whenever you needed one. But before Menard Inc., most lumberyards and hardware stores were equipped to serve contractors, not consumers. John Menard's first store, founded in Eau Claire, Wis., in the early 1970s, was open on weekends, and with a well-stocked warehouse on the premises, shoppers usually found what they were looking for. Today he owns some 200 stores, and Menard, the oldest of eight siblings who grew up on a dairy farm, is a billionaire.

Menard had the Midwest almost to himself until the 1990s, when Home Depot and Lowe's began challenging him on his turf. He responded by cutting prices, opening more stores, and adding products. Sales were up more than 7% in 2004, to $6 billion, according to Hoover's. In his spare time, Menard races sports cars and go-carts. And cars owned and operated by Team Menard have become a fixture in the auto-racing world. Tony Stewart, for example, won the 1996-97 Indy Racing League championship driving a Menard car.

Still Menard, who seldom grants interviews, is controversial. While all successful entrepreneurs are vulnerable to being sued, Menard has faced a steady stream of litigation. Menard Inc. was sued by the EEOC in January for failing to submit required reports documenting its number of women and minority employees -- Menard has said it was a "misunderstanding" and that it does not track its workers by race or gender. In 1997, the company paid a $1.7 million fine to the state of Wisconsin for illegally disposing of hazardous ash.

In 2003, the Minnesota attorney general charged that Menard Inc. sold arsenic-tainted mulch in packaging labeled "ideal for playgrounds" -- allegations the company is disputing. And in 2004, Wisconsin's attorney general charged that the company poured toxic chemicals down a distribution center's floor drain. Menard Inc., which did not return repeated phone calls, has denied those charges. "We intend to fight this case with everything we have," a spokesperson told the trade publication Home Channel News last October. "And we expect to win."

Last updated: Apr 1, 2005




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