January 22, 2022

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McDonald’s settles racial discrimination lawsuit by Herb Washington

Washington, a former Oakland A’s player, filed his suit in Ohio federal court in February, saying the Chicago-based chain had a pattern of steering Black owners into restaurants in impoverished neighborhoods that yielded less profit. He had been a franchisee for four decades, owning McDonald’s restaurants in New York, Ohio and Pennsylvania. At one point, his was the country’s largest Black-owned McDonald’s franchise operation with about 25 restaurants.

He alleged in the lawsuit that the fast-food giant began a campaign to drive him out in 2017 for speaking out against the “predatory, racially biased steering practices” against franchisees.

When the suit was filed, McDonald’s said in a statement it had invested “significantly” in his organization. “This situation is the result of years of mismanagement by Mr. Washington, whose organization has failed to meet many of our standards on people, operations, guest satisfaction and reinvestment,” the statement said. 

McDonald’s said in a statement today that the court did not find it had violated any laws.

“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,” the statement said.

Washington could not immediately be reached for comment.

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The lawsuit Washington filed earlier this year against the Chicago-based company was not the first alleging racial discrimination. Over the summer, McDonald’s defeated another suit accusing it of discriminating against the Black franchisee operators of four of its Tennessee restaurants. 

While McDonald’s has worked to bat down the discrimination suits, it has launched several initiatives to increase diversity at the company, including recruiting more franchisees who identify as members of underrepresented groups and tying executive pay to diversity goals. 

The deal with Washington was the second lawsuit settlement McDonald’s has announced today. This morning, it announced former CEO Steve Easterbrook, who was fired over sexual relationships with subordinates, agreed to return $105 million in cash and equity awards to settle a lawsuit McDonald’s had filed against him.