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EEOC sues McDonald’s franchisee accused of racial discrimination

The U.S. Equal Employment Opportunity Commission (EEOC) on December 14 sued a McDonald’s franchisee, accusing it of rejecting a class of Black applicants, as racial allegations continue to plague the Chicago-based fast-food chain.

The EEOC filed the lawsuit against Pensec, a Wisconsin-based corporation that operates nine McDonald’s fast-food restaurants in Milwaukee.

The EEOC said its Chicago District Office is responsible for handling 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.

According to the lawsuit, unsuccessful Black applicants at one of Pensec’s fast-food restaurants in Milwaukee were told the store manager “Don’t like n—-s” and that the store needed “Spanish people.” The EEOC said the location also had a statistically significant shortfall in the hiring of Black employees, based on 2010 census data for Milwaukee County.

The EEOC’s Chicago District Director Julianne Bowman said, “At the time EEOC began investigating the franchise’s hiring practices, the restaurant had very few Black employees. The absence of Black employees was highly unlikely the result of chance.”

“Unfortunately, race discrimination continues to be a barrier to African-Americans obtaining employment. This is the latest in a series of such challenges,” said Gregory Gochanour, EEOC’s regional attorney in Chicago.

The EEOC said the allegation against Pensec violates Title VII of the Civil Rights Act of 1964, which prohibits discrimination in the workplace based on race. The EEOC filed suit against the company in U.S. District Court for the Eastern District of Wisconsin (EEOC v. Pensec Inc. dba McDonald’s, Civil Action No. 21-cv-1409) after first attempting to reach an out of court settlement through its voluntary conciliation process.

In its lawsuit, the EEOC seeks back pay, compensatory damages, and punitive damages for Black applicants, as well as injunctive relief intended to prevent further alleged discrimination by Pensec.

The EEOC is looking for individuals who know about Pensec’s hiring practices or who believe they were not hired by the company at the West Washington location because of their race or national origin. They urge individuals to contact the EEOC at 414-662-3684.

The McDonald’s Corporation faces a class-action lawsuit that has grown to 77 plaintiffs after 52 Black McDonald’s franchise owners in Chicago sued the fast-food chain in 2020.

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 ran 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 the 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.”

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