McDonald’s to pay Black store owner $33.5M to end bias suit

( McDonald’s agreed to pay a $33.5 million settlement to a former baseball player who owned multiple McDonald’s franchises in Ohio and Pennsylvania, bringing an end to a racial discrimination lawsuit he filed against the fast-food giant earlier this year.

Herb Washington, who is black, filed a lawsuit in February alleging that McDonald’s treats white franchise owners more favorably and prevented him from buying restaurants in more affluent communities.

In his lawsuit filed in US District Court in Youngstown, Ohio, Washington claimed McDonald’s tried to steer him toward stores located in poorer neighborhoods. He also argued that stores owned by black franchisees averaged approximately $700,000 less in annual sales per store than the ones owned by white franchisees.

In announcing the settlement last Thursday, the fast-food company maintained that “discrimination has no place at McDonald’s.” In its statement, the company said it remained confident in the strength of its case, but chose to settle so McDonald’s could “continue focusing on our commitments to the communities we serve.”

As part of the settlement agreement, Herb Washington agreed to drop his suit and sell his franchises back to McDonald’s.

In its statement, McDonald’s said the $33.5 million it was paying Washington for his 13 franchises was “no more than what we deem a fair price for the value of the restaurants.”

In September of last year, over fifty black former franchise owners sued McDonald’s making similar allegations against the company. In that suit, the black owners alleged that the stores McDonald’s offered to sell them were located in poor areas that had higher insurance and security costs. They also claimed they were denied things McDonald’s offered to white franchise owners, like rent assistance during renovations.

Herb Washington is a former Michigan State University track star who for a short time in the mid-1970s played with the Oakland Athletics. Attorneys for Washington declined to comment on the settlement.

Earlier this month, McDonald’s announced that it would be spending $250 million over the next five years to recruit and support minority franchise owners.