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McDonald’s Corp. Facing Lawsuit Alleging “Racial Stereotyping”

09/22/2022

District Judge Fernando Olguin of the U.S. District Court in Los Angeles denied a motion of dismissal filed by McDonald’s Corporationon Wednesday, September 21st. At issue is a lawsuit by media mogul Byron Allen, CEO of Entertainment Studios Networks, Inc. and Weather Group, LLC, claiming that McDonald’s Corporation constrained spending for minority-owned media.  Allen claims that McDonald’s Corporation used a separate ad agency with a small budget for what he designated as an “African American Tier”.

 

In his ruling, Judge Olguin noted, “Taken together and construed in the light most favorable to plaintiffs, they have alleged sufficient facts to support an inference of intentional discrimination.”

 

In rebuttal, the lawyer representing McDonald’s Corporation claimed that the lawsuit was about revenue, not race and that there was no discrimination.  Allen presented evidence that, although Black customers represented 40 percent of fast-food revenue, McDonald’s spent 0.3 percent of its $1.6 billion U.S. ad budget on Black-owned media in 2019.  Most recently, McDonald’s pledged to boost National ad spending with Black-owned media to 5 percent, suggesting that pre-trial submissions by the plaintiff had some substance.