McDonald’s Defeats Bias Lawsuit Filed by Black Franchisees
(Bloomberg) -- McDonald’s Corp. defeated a lawsuit accusing it of discriminating against the Black franchise operators of four of its Tennessee restaurants by pushing them to operate in crime-ridden neighborhoods.
U.S. District Judge Harry Leinenweber ruled on Tuesday that the suit, filed in October, lacked facts showing McDonald’s misled the franchisees in their contracts and treated White franchisees differently. Leinenweber gave the plaintiffs an option to file an amended complaint that address the inadequacies he pointed out within 30 days.
“The court does not mean to imply that McDonald’s operations over the years have not been tainted by the brush of racism,” Leinenweber said in the ruling. “The fact that the first African-American franchisees didn’t appear until 15 years after the franchise system was established in 1955 provides the opposite inference. However, historical discrimination cannot be the base for a Section 1981 discrimination suit filed in 2020.”
The judge was referring to part of a federal law that allows people to sue for racial discrimination they face in making and enforcing contracts.
The ruling comes as the fast food chain faces another bias suit in Illinois federal court, filed in August by 52 Black former franchisees seeking as much as $5 million in damages for each of more than 200 stores they operated. The case is pending.
James Ferraro, a lawyer for the franchise operators, said they would file an amended complaint. McDonald’s didn’t immediately respond to a call and email seeking comment on the ruling.
The case is Byrd v. McDonald’s, 20-06447, U.S. District Court, Northern District of Illinois (Chicago).
©2021 Bloomberg L.P.