Dec 8, 2024 Story by: Editor
A California federal judge has determined that Byron Allen’s $10 billion racial discrimination lawsuit against McDonald’s will proceed to trial.
US District Judge Fernando M. Olguin described the decision as a “close call” but concluded that Allen’s allegations of “racial stereotyping” by the fast-food giant, particularly its lack of advertising with Black-owned media, should be resolved by a jury.
“At a minimum, this is the type of case where the ‘trial court is permitted, in its discretion, to deny even a well-supported motion for summary judgment, if it believes the case will benefit from a full hearing,’” Olguin wrote in his 25-page ruling.
Allen’s lawsuit contends that McDonald’s breached federal and California civil rights laws by excluding his networks from the majority of its advertising budget. He alleges that his Entertainment Studios Networks, Inc. and Weather Group LLC, which operates the Weather Channel, were relegated to a separate “African American tier” with a smaller advertising budget and a Black-focused ad agency. According to Allen, this resulted in his companies losing out on tens of millions in annual revenue.
The lawsuit also claims that Allen and his companies sought inclusion in McDonald’s primary advertising platform but were denied because of his race. Entertainment Studios described this as “blatant and pernicious discrimination.” The complaint highlights that while about 40% of McDonald’s customer base is Black, the company allocated less than $5 million of its $1.6 billion advertising budget in 2019 to Black-owned media.
“McDonald’s, like much of corporate America these days, publicly touts its commitment to diversity and inclusion, but this is nothing more than empty rhetoric,” the complaint states.
Filed in 2021, the lawsuit coincided with McDonald’s announcement that it would increase its national ad spending on Black-owned media from 2% to 5% by 2024, alongside additional investments in platforms owned by Hispanic, Asian-American, women, and LGBTQ entrepreneurs.
In a statement to theGrio, Allen praised the court’s decision. “We have overwhelming evidence against McDonald’s — who has been sued by its Black executives, Black franchisees, and their global head of security — for racial discrimination,” Allen said. “It is time for the McDonald’s Board of Directors, stockholders, and civil rights organizations nationwide to call for the resignation of CEO Chris Kempczinski, who was caught sending racist text messages about Black and Hispanic people.”
McDonald’s, however, downplayed the ruling, stating it did not signify the merits of Allen’s case. “We are prepared to show that this case is utterly baseless. McDonald’s invested in media properties that aligned with the company’s business strategy and, like any other rational business, declined to invest in those that had low ratings or failed to reach the company’s target audiences,” the company said in its statement. Source: New York Post
