McDonald’s ‘Strong-Armed’ African-American Franchisees: Lawsuit

McDonald’s ‘Strong-Armed’ African-American Franchisees: Lawsuit

At McDonald’s, not everyone is “loving it,” especially two Black McDonald’s executives who claim the fast-food giant treats its Black franchisees unfairly. Photo by Andreeew Hoang on Unsplash

Not everyone is “loving it” at McDonald’s, especially two Black McDonald’s executives who claim the fast-food giant treats its Black franchisees unfairly. 

The two have filed a lawsuit claiming they faced discrimination at the fast-food giant. They also say they faced retaliation from the company for speaking out about the unequal treatment of Black franchise owners. 

According to a Business Insider investigation, McDonald’s Black franchisees claim that their stores net roughly $68,000 less per month than the system-wide average. 

“The culture of and fabric of the company hasn’t cared to address the disparity issue towards African Americans,” McDonald’s franchisee Jim Byrd told Business Insider. 

The two executives who filed the lawsuit are Vicki Guster-Hines and Domineca Neal, two McDonald’s operations officers based in Dallas, Texas. Their lawsuit, which was filed in the North District Court of Illinois, alleging race discrimination, claims a hostile work environment and unlawful retaliation. 

“Guster-Hines and Neal are seeking millions of dollars in damages and lost pay. The executives also said that they faced retaliation for speaking out against discrimination more generally at the company — including the unequal treatment of Black franchisees that they witnessed at the company,” Business Insider reported.

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According to the lawsuit, McDonald’s saw a “startling decrease” in its number of Black franchisees after 2015, when Steve Easterbrook became CEO and Chris Kempczinski became the head of U.S. business. In November 2019, Kempczinski became CEO when Easterbrook was abruptly forced to leave the company. 

“The disproportionate loss of nearly one-third of the African American franchisees in the Easterbrook and Kempczinski era was intentional or, in the alternative, it was in reckless disregard of plainly foreseeable consequences of business decisions made by Easterbrook and Kempczinski and their minions,” the complaint alleges. 

There seems to be evidence to back up the complaint. The National Black McDonald’s Owners Association provided data to Business Insider that found there were 304 Black McDonald’s franchisees at the end of 2008. This dropped to 222 by the end of 2017 and by late 2019, two franchisees told Business Insider, Black franchisees made up less than 200 of the roughly 1,700 franchisees at McDonald’s.

But the company says it remains committed to its franchisees of color.

“At McDonald’s, our actions are rooted in our belief that a diverse, vibrant, inclusive and respectful company makes us stronger,” a McDonald’s representative said in a statement. 

According to the company, almost half of all its U.S. corporate officers (employees at a vice-president level or above) are people of color, representing an increase of nearly 10 percent since 2013, and all 10 U.S. field vice presidents are people of color. 

“While we disagree with characterizations in the complaint, we are currently reviewing it and will respond to the complaint accordingly,” the representative said.