A McDonald’s franchise in Milwaukee has settled a racial discrimination lawsuit by the Equal Employment Opportunity Commission (EEOC), which accused the fast-food restaurant of saying a racial slur, and not hiring Black applicants because of the color of their skin.
The franchise is owned by Pensec, Inc., a Wisconsin corporation which operates nine McDonald’s fast-food restaurants. As part of the settlement that was announced on February 28, Pensec will pay $31,137.
According to EEOC’s lawsuit, Pensec failed or refused to hire Black applicants because of their race. Unsuccessful Black applicants at the location were told the store manager, “Don’t like n—–s,” and that the store needed “Spanish people.”
The EEOC said that location, on West Washington Street in Milwaukee, also had a statistically significant shortfall in the hiring of Black employees based on census data for the area.
In addition to the monetary relief, the consent decree entered by U.S. District Court Judge J.P. Stadtmueller prohibits the company from discriminating in the future; requires the company to make best efforts to reach hiring goals for Black employees; and mandates Pensec provide training on Title VII to its employees and make regular reports to the EEOC regarding its compliance with the decree.
The EEOC said the alleged conduct violates Title VII of the Civil Rights Act of 1964, which prohibits discrimination in the workplace based on race.
The EEOC filed its lawsuit (Civil Action No. 21-cv-1409) in U.S. District Court for the Eastern District of Wisconsin after attempting to resolve the case through its conciliation process.
“Stopping race discrimination in hiring is one of the fundamental objectives of the EEOC,” said Gregory Gochanour, the EEOC’s regional attorney in Chicago. “This consent decree furthers those objectives by requiring that the company take steps to reform its hiring practices.”
Julianne Bowman, director of the EEOC’s Chicago District Office, added, “We are pleased that we were able to resolve this case with Pensec. The consent decree will ensure that the federal laws against discrimination are followed, that all future applicants, regardless of their race, will be given the consideration that they deserve.”
The EEOC’s Chicago District Office is responsible for processing charges of discrimination, administrative enforcement and the conduct of agency litigation in Illinois, Wisconsin, Minnesota, Iowa and North and South Dakota, with Area Offices in Milwaukee and Minneapolis.
In 2020, 52 Black franchise owners in Chicago filed suit against McDonald’s, whose corporate headquarters is in the West Loop. The lawsuit alleges that McDonald’s steered Black franchisees toward certain neighborhoods where sales are lower while costs are higher, leaving them with less money and yet higher scrutiny from corporate headquarters.
The franchisees, who operated a total of more than 200 restaurants in the past decade, are seeking up to $1 billion in damages.
In 2020, two senior McDonald’s executives sued the company for racial discrimination. Under former CEO Steve Easterbrook, the suit alleges the chain “became overtly hostile to African Americans in both words and deeds.”
The lawsuit also claims that as a result of that discrimination, McDonald’s fired and demoted Black leadership, pushed out Black franchisees and lost African American customers.
Earlier this month, SOC Investment Group, an adviser to union pension funds, urged McDonald’s in a shareholder’s proposal that it should have an independent firm conduct a civil rights audit to help determine whether its current policies are creating social and economic inequality among its franchisees and employees.
The SOC Investment Group says the restaurant chain should oversee a third-party audit that takes input from franchisees, corporate employees, suppliers and customers.
Earlier this month, a federal judge threw out a $10 billion lawsuit against McDonald’s Corporation by media entrepreneur Byron Allen, who accused the fast-food chain of racial discrimination for not advertising with Black-owned media.
According to Allen’s complaint, McDonald’s refused to advertise with lifestyle channels owned by his Entertainment Studios Networks since their 2009 launch, or with The Weather Channel since Allen bought its parent Weather Group in 2018.
U.S. District Judge Fernando Olguin in Los Angeles ruled that Allen did not offer enough factual evidence to show that McDonald’s “intentionally and purposefully discriminated against them.”