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Verdicts & Settlements

McDonald’s Settles Discrimination Lawsuit with Black Franchise Owner

— December 22, 2021

In his initial complaint, former MLB player Herbert Washington alleged that McDonald’s tried to “pigeonhole” him into only opening franchises in “low-volume,” predominately Black neighborhoods.

McDonald’s has settled a racial discrimination lawsuit filed by a Black franchise owner, who claimed that the fast food company steered him toward less profitable restaurants in low-income, predominately African-American neighborhoods.

According to CNN, the lawsuit was initially filed by retired Major League Baseball player Herbert Washington in February.

Washington, who has been operating McDonald’s franchises since the 1980s, alleged that McDonald’s intentionally made it more difficult for him to succeed compared to White franchise owners. His lawsuit claims that the company tried to “drive him out” after he levied accusations of race-based discrimination.

Specifically, Washington said that McDonald’s “pigeonholed him into operating restaurants in low-volume Black neighborhoods and then forced him to sell his locations after he complained.”

In 2017, the company told Washington that he was ineligible to continue expanding his store base—something the former baseball player had wanted to do to offset the sorts of store renovation costs borne by franchisees.

All the while, Washington says that McDonald’s subjected his locations to “targeted and unreasonable inspections and harsh grading,” apparently to coerce him into selling his stores.

A gavel. Image via Wikimedia Commons via Flickr/user: Brian Turner. (CCA-BY-2.0).

Washington says that McDonald’s harsh treatment was a direct consequence of his challenging McDonald’s suggestion that he, a Black man, focus primarily on low-volume Black neighborhoods.

“When I stood up for myself and other Black franchisees, McDonald’s began dismantling my life’s work, forcing me to sell one store after another to white operators,” Washington said in his lawsuit.

According to Vibe, McDonald’s appears to have since settled the lawsuit for about $33.5 million.

However, McDonald’s said the settlement amounts to “no more than we deem a fair price for the value of the restaurants”—as part of the agreement, McDonald’s will take ownership of 13 of Washington’s 14 restaurants.

In a post-settlement statement, McDonald’s observed that the court made no finding or judgment of wrongdoing.

“The court did not find that the company violated any laws,” McDonald’s said. “Discrimination has no place at McDonald’s. While we were confident in the strength of our case, this resolution aligns with McDonald’s values and enables us to continue focusing on our commitments to the communities that we serve.”

CNBC notes that McDonald’s recently settled a similar lawsuit in Tennessee, brought by Black franchise operators James and Darrell Byrd.

In their complaint, the franchisees said that McDonald’s gave preferential treatment to White operators.

While the Byrds were seeking $5 million per store to compensate for their losses, McDonald’s agreed to purchase all four of their locations for a total of $6.5 million. As part of the settlement, the Byrds said they would leave the McDonald’s franchising system.


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