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McDonald’s sued by Black franchisees for discriminatory practices

MStar | Wikipedia

McDonald’s has been sued for alleged racial discrimination for the third time this year. In October, two current franchisees claimed McDonald’s put them in locations that made the restaurants underperform.

The lead plaintiffs in this suit are brothers James Byrd Jr. and Darrell Byrd, who own and operate four McDonald’s in the Nashville area. They are seeking class action status on behalf of them and other Black franchisees. This suit was filed by the same law firm where a similar racial discrimination suit was filed by 52 former Black franchisees back in August, according to Reuters.

The franchisees stated that the low-income locations McDonald’s forced them into were “financial suicide missions,” compared to white franchisees, which has set them up for failure since these areas require higher security and insurance costs, but bring lower sales, CNBC said.

Also, the lack of opportunity for Black franchisees has made owners believe they are “bad businesspeople,” rather than victims of the company’s “targeted discrimination,” ABC News reported.

The suit asks for compensatory damages of about $4 to $5 million per store.

The court documents mention that the Byrd brothers and others that agreed to be a part of the suit are at risk of retaliation by complaining.

The court documents, however, say the franchisees feel they “cannot allow other Black McDonald’s franchisees to be misled and harmed by the same pipeline of discrimination that has plagued Black franchisees for decades,” per ABC News.

McDonald’s asked a judge to dismiss the lawsuit, stating that they support their franchisees and want them to be successful on Oct. 23. They claim to have made efforts to buy the restaurants from the Byrds, but the Byrds wanted to go to court.

The company expressed that they have tried to help the Byrds in another way as well. McDonald’s invested “significantly in each of their respective businesses after they ran into business difficulties caused by mismanagement of their organizations,” the company said to Restaurant Dive.

Former franchisees have argued that McDonald’s has a systemic racism issue. In a suit filed in January, two former executives at McDonald’s claimed the company created a “hostile and abusive work environment” that got rid of some of the company’s upper-level positioned Black employees.

In fact, the number of Black employees in high positions decreased from 42 to just seven in 2019, VICE reported. Some of this was because of the demotion of these workers.

“McDonald’s should be in the doghouse when it comes to African Americans right now,” Chin Jou, an author and a senior lecturer in American history at the University of Sydney said.

McDonald’s has denied all the allegations against them and may have used current collaborations with minorities like Travis Scott, “one of the most prominent Black artists in America,” and J Balvin to counteract claims of racism, according to VICE..

McDonald’s acknowledged that it was taking the claims seriously, but also said the franchisees’ claims rely on “vague and conclusory allegations.”

“We will defend against this lawsuit even as we move forward with the actions needed to foster an environment where equitable opportunity is part of the lived experience for McDonald’s franchisees…” the fast food company said, according to CNBC.

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