McDonald’s is settling a lawsuit with Herb Washington, a former MLB player and franchisee who accused the company of racial discrimination, by buying the remainder of his shops for $33.5 million.
The owner of over a dozen resturuants in Ohio and Pennsylvania claims that the company had him operate restaurants in “urban neighborhoods,” Cleveland.com reports, and that the company graded his stores unfairly and forced him to downsize. The suit, which was filed in the U.S. District Court in Youngstown, claimed that “Black owners average around $700,000 less in annual sales per store than white owners.”
Washington, who once owned 23 restaurants in 2017 before downsizing to 14 at the time of the suit, is welcoming the $33.5 million to purchase his remaining 13 restaurants as part of the settlement agreement.
“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 said at the time of the filing that when he “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.”
The company settled a suit in Tennessee filed by two Black operators, James and Darrell Byrd, last week, purchasing four restaurants for $6.5 million after the men claimed McDonald’s treated white operators better, per CNBC.
On another note, the fast food giant also announced that it will be recruiting more diverse franchisee operators globally and investing $250 million over five years to assist with loans.