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Lawsuit: McDonald's policies 'overtly racist,' 'purged' African Americans from leadership, franchisee ranks

Lawsuits

By Jonathan Bilyk | Jan 8, 2020

Mcdonalds

McDonald’s has been hit with a discrimination lawsuit, accusing the senior leadership at the world’s largest fast food chain of creating a new culture within the company that became “overtly racist,” allegedly pushing out large numbers of African American restaurant franchisees and corporate executives.

On Dec. 7, plaintiffs Victoria Guster-Hines and Domineca Neal, identified in the complaint as senior franchising executives at McDonald’s Corp., filed a complaint in Chicago federal court against the Chicago-based restaurant giant. The plaintiffs are represented in the action by attorneys Carmen D. Caruso and Linda C. Chatman, each of Chicago.

The complaint centers on changes that took place within the McDonald’s corporation after the arrival of a new company leadership team, led by CEO Steven Easterbrook, who, the complaint said, was “imported … from England” to replace former CEO and President Don Thompson,  “the only African American to hold these top positions” in McDonald’s history.

McDonald’s selected Christopher Kempczinski to serve as corporate president in 2016. Kempczinski and Easterbrook are also named as defendants in the lawsuit.

The complaint alleged McDonald’s had always had a “covert policy” of “racial discrimination” that predated Easterbrook’s arrival. However, the complaint said Easterbrook used the “covert policy” as a “foundation … to embark on the overtly racist course of conduct” alleged in the lawsuit.

Under Easterbrook, the complaint noted McDonald’s sought to enhance its social position as a “progressive” company by deepening “relationships with communities on the issues that matter to them.”

However, the complaint said Easterbrook and his team focused instead on “gender diversity,” not racial diversity.

“… Under Easterbrook … McDonald’s became overtly hostile to African Americans in both words and deeds,” the complaint said.

The lawsuit alleges McDonald’s decreased marketing aimed at African Americans, allegedly resulting in decreased business for the fast food chain from African American customers.

“As a consumer block, African Americans were singled out as less desired by McDonald’s,” the complaint said.

Further, the complaint asserted, under Easterbrook’s leadership, “nearly one out of three African American franchisees left the McDonald’s system” – a result, the complaint alleged, of McDonald’s corporate decisions. The complaint asserted McDonald’s required African American franchisees to take on “onerous costs” through “expensive capital expenditures” under the company’s “Big Bolder Vision 2020” program.

Further, the complaint alleged McDonald’s used “strong-arm tactics to drive unwanted franchisees out of the system,” including “unfair” grading systems, which they claimed jeopardized “a franchisee’s rights” and drove down their equity in their franchise businesses.

The complaint alleged McDonald’s also “purged” African Americans from its senior corporate leadership ranks, allegedly to better conceal its “’big picture’ systemic discrimination.”

The complaint said, from 2014-2019, McDonald’s allegedly fired 30 officer-level executives and demoted five others, including Guster-Hines and Neal. In all, the complaint said the number of African American executives at McDonald’s dropped from 42 to 7.

When remaining executives, including Guster-Hines and Neal, complained, the lawsuit asserts they were subjected to a “hostile work environment” and labeled “Angry Black Women,” among other forms of “racial discrimination” and “disparate treatment” compared to white colleagues.

The complaint asserts McDonald’s engaged in illegal disparate treatment, created a hostile work environment, and retaliated against the plaintiffs for complaining.

The plaintiffs have asked the court to award unspecified damages, including punitive damages and attorney fees.

In a statement published by Business Insider, in response to the lawsuit, McDonald's said: "Our actions are rooted in our belief that a diverse, vibrant, inclusive and respectful company makes us stronger. While we disagree with characterizations in the complaint, we are currently reviewing it and will respond to the complaint accordingly."

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Organizations in this Story

McDonald's CorporationCarmen D. Caruso Law FirmU.S. District Court for the Northern District of Illinois

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