Home Depot, Motel 6 Drop Agency Over Founder’s Racist Remark

(Bloomberg) -- A number of consumer companies are cutting ties with advertising agency Richards Group after a report that its founder made a racist remark about a proposed Motel 6 ad campaign.

According to Ad Age, Stan Richards, 87, said the suggested ad for the motel was “too Black” and wouldn’t resonate with the chain’s “significant White supremacist constituents.” It took place during an internal meeting at the agency last week, the motel chain said.

Glenn Dady, principal and creative director of Richards Group, said in an emailed statement the agency’s “brand has been tarnished.” Dady was named as Stan Richards’s successor late last year.

“We understand and regret the pain and concerns of all those who were deeply troubled by the words our founder spoke. He can’t take them back,” he said. “We can only ask for forgiveness and promise to learn and be better.”

Ad Age reported that Richards apologized for the remark on an agency-wide Zoom call.

Cutting Ties

Motel 6 said it was “outraged” by the statements and has cut ties with the agency, effective immediately. “We are a company who embraces diversity of all forms and have a zero tolerance policy for hateful comments of any kind, whether that be within our organization, at third-party vendors or at our properties,” a spokesman for Motel 6 said in an emailed statement.

Home Depot Inc., another client, also announced it would drop the agency following the remark.

“We do not tolerate discrimination in any form, so we were shocked and saddened when we learned of this incident. We have immediately begun the process of finding a new advertising agency,” Home Depot spokeswoman Sara Gorman said.

Orkin Inc., the pest-control company, said it was “actively reviewing” its partnership with Richards Group. “We are disappointed with the news,” a spokesperson said.

‘Deeply Concerned’

The Salvation Army, which also has worked with Richards Group, said it was “deeply concerned” by the comments.

“We are encouraged by the fact that Mr. Richards has made an apology, and we understand that significant changes are anticipated at the agency,” the Christian charitable organization said in a statement. “We will closely monitor these changes to ensure that they are fully aligned with our mission to inclusively love and serve all.”

The quick severing of ties reflects a new reality among U.S. companies: They’re less willing to ignore the casual racism that was long commonplace in corporate America. Sparked by the death of George Floyd at the hands of the police in May and fueled by months of protests against police brutality, companies that once chose to quietly sit out tough conversations about race are now taking a stance.

Even before Floyd’s death, companies were starting to face a reckoning on race in America. In 2018, the chairman of Papa John’s International Inc., John Schnatter, used a racist slur on a conference call with a media agency, prompting his exit from the chain he founded. He later claimed the comment was taken out of context.

‘Powerful People’

Richards’s comments may reflect both a generational disconnect from what’s acceptable in society, as well as an assumption that his power and wealth would insulate him from repercussions, said John Paul Rollert, who teaches business ethics at the University of Chicago Booth School of Business. Richards is both older -- in his 80s -- but also the founder of the company, and that gives him a different frame of reference from other employees.

“It’s another example of someone who has so much money that he thinks he can afford not to watch his mouth, and we’re obviously living in a world where the price of such behavior has gone up,” Rollert said. “When everything we say and do is being documented not only by email but also by Zoom, a company has to have pretty much a no-tolerance policy for such offensive language.”

It’s more often the case that powerful people make such remarks, Rollert added, because they think they can get away with it and “it’s actually a way of affirming they are the most powerful person in the room -- that they can make a joke that would get anyone else fired. Increasingly, they can’t.”

©2020 Bloomberg L.P.