- McDonald's settled a lawsuit brought against the fast food giant by Herb Washington, a Black franchisee who had accused the company of racial discrimination.
- Washington, a former Major League Baseball player, was once the chain's largest Black franchisee in the U.S.
- In exchange for his agreement to exit the McDonald's system and dismiss the pending litigation, McDonald's has purchased 13 restaurants owned by Washington for $33.5 million.
McDonald's said Thursday it has settled a lawsuit brought against the fast food giant by Herb Washington, a Black franchisee who had accused the company of racial discrimination.
Washington — a former Major League Baseball player and the chain's largest Black franchisee in the U.S. at one point — operated 14 McDonald's restaurants at the time he filed his lawsuit, down from 23 in 2017.
In exchange for his agreement to exit the McDonald's system and dismiss the pending litigation, McDonald's purchased 13 restaurants for $33.5 million. The fast food giant said the amount is what it deems to be a fair price for the restaurants.
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"The court did not find that the company violated any laws," McDonald's said in a statement. "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."
Washington had alleged the company discriminated against him by having him helm low-volume restaurants in Black neighborhoods and by forcing him to downsize his store base years later after grading his locations unfairly.
"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 a statement at the time of the filing.
Last week, McDonald's also settled a similar suit brought in Tennessee by two Black operators, James and Darrell Byrd. The franchisees, who are brothers, alleged McDonald's gave preferential treatment to white operators. They were seeking as much as $5 million per store to compensate for their losses.
McDonald's agreed to purchase four restaurants for $6.5 million, and the Byrds agreed to drop their suit and leave the system. Similarly, the court didn't find that McDonald's had violated any laws, the company said.
The fast food giant still has an outstanding suit that was filed on behalf of 77 former Black franchisees alleging racial discrimination.
Separately, McDonald's last week announced it would recruit and train more diverse franchisee operators globally. It also committed to investing $250 million over five years to help finance loans for underrepresented groups.
Earlier Thursday, McDonald's said its board reached an agreement with former CEO Steve Easterbrook. The disgraced executive agreed to return $105 million in cash and equity awards that the company said he would have forfeited had he been truthful at the time he was fired in November 2019.