A Chicago judge has pared a discrimination suit brought against McDonald's by two executives, which alleges corporate brass thinned Black executives and franchisees from the company's ranks.
The June 25 rulings on motions to strike and dismiss were issued by Judge Mary Rowland, of U.S. District Court for the Northern District of Illinois.
In January 2020, Victoria Guster-Hines and Domineca Neal sued the Chicago-based burger empire, alleging they were discriminated against because they are Black, while they were McDonald's executives. Also named as defendants are Steven Easterbrook, who was president and CEO from 2015 to November 2019, as well as current President and CEO Christopher Kempczinski and Chief Field Officer Charles Strong.
U.S. District Judge Mary Rowland
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Guster-Hines joined McDonald's in 1987 and Neal in 2012.
"They bring suit to redress McDonald’s continuing pattern and practice of intentional race discrimination that should outrage everyone, especially those who grew up going to
McDonald’s and believing the 'Golden Arches' were swell," said plaintiffs' attorneys, Carmen Caruso and Linda Chatman, of Chatman Law Offices in Chicago, in a court filing.
Plaintiffs alleged McDonald's had a "covert policy" of racism before Easterbrook's arrival, but under Easterbrook's leadership engaged in "overt" discrimination to drive out Black executives, employees and franchisees.
According to plaintiffs, McDonald's allegedly chased away almost one-third of African American franchise holders, through allegedly unfair grading systems and requirements they make burdensome capital expenditures. The company further allegedly reduced its advertising aimed at Blacks, which decreased business at Black-operated franchises.
In addition, plaintiffs said McDonald's fired 30 Black executives and demoted several more, including Guster-Hines and Neal, between 2014 and 2019. Plaintiffs claimed white executives were not terminated or demoted at the same rate. Neal ended up being fired in February 2020, court papers said.
Guster-Hines and Neal also alleged they were targets of racist remarks and conduct in the corporate offices, and suffered retaliation for lodging their lawsuit.
Defendants moved to dismiss portions of the 14-count, 99-page suit on technical grounds, to which Judge Rowland agreed in part.
Rowland tossed certain claims, which he said plaintiffs must first let play out with the U.S. Equal Employment Opportunity Commission.
Rowland also threw out plaintiffs' claims that McDonald's abandonment of racial diversity in favor of gender diversity, was a "slap in the face to African American senior executives," sending the message the "dream of racial equality was dead and buried." Rowland determined the impact of this alleged policy shift may have been psychological, but did not change the terms or conditions of their employment.
In addition, Rowland dismissed the claims alleging discrimination against Black customers and franchisees, saying any such alleged discrimination is not an "employment practice" that belongs in the suit.
As far as Easterbrook, Rowland concluded the "vast majority of allegations" were "simply not adverse employment actions against the Plaintiffs."
As examples, Rowland noted Easterbrook allegedly focused on gender goals, cut advertising to the Black community and let a company group, which was dedicated to increasing racial diversity, go dormant. None of these claims constitute harassment, Rowland said.
Rowland also found some of the retaliation claims against Easterbrook, Kempczinski and Strong should fall away, because there was no indications the three men were either aware of or took part in any alleged retaliation.
Among the surviving claims against all defendants, are those alleging disparate treatment on the basis of race.
Other claims of creating a hostile work environment stand against Strong and McDonald's, and a retaliation claim remains against McDonald's.
Plaintiffs have not specified the amount of damages they seek.
Both sides are to file a joint status report on the case by July 28.
McDonald's, as well as Kempczinski and Strong are defended by the Chicago office of the New York City-based firm Proskauer Rose.
Easterbrook is defended by the Chicago office of the Pittsburgh-based firm K&L Gates.