Two black McDonald’s executives are suing the fast-food corporation, alleging racial discrimination and a hostile work environment under the company’s former chief executive, according to reports.
Vicki Guster-Hines and Domineca Neal, senior executives at the company in Dallas, allege that McDonald’s carried “a ruthless purge” of high-ranking black executives after Steve Easterbrook and Chris Kempczinski took over the company in 2015.
Easterbrook was CEO until November, when the company removed him over a relationship with an employee. He left with more than $37 million in stock awards and a severance settlement of $675,000.
Kempczinski, who at the time of the alleged actions by the company was the head of U.S. business, later replaced Easterbrook as CEO.
The suit alleges that the number of African Americans in the top ranks of McDonald’s operations declined to seven last year from 42 in 2014.
According to Neal and Guster-Hines, McDonald’s used “strong-arm tactics to drive unwanted franchisees out of the system.” Those tactics included grading franchised restaurants unfairly and preventing owners from selling their restaurants in an open market.
“The disproportionate loss of nearly one-third of the African American franchisees in the Easterbrook and Kempczinski era was intentional or, in the alternative, it was in reckless disregard of plainly foreseeable consequences of business decisions made by Easterbrook and Kempczinski and their minions,” the complaint alleges.
McDonald’s is pushing back on the lawsuit. The company said that over the last five years it decreased the number of officer-level positions, not just those held by African Americans. It also said that under Kempczinski, diversity and gender balance are a top priority.
“At McDonald’s, our actions are rooted in our belief that a diverse, vibrant, inclusive, and respectful company makes us stronger. In the U.S., in particular, almost half of our Corporate Officers are people of color — an increase of nearly 10 percent from 2013 — and all 10 of the U.S. Field Vice Presidents are people of color,” the company said in a statement, reported by NBC News.
Guster-Hines and Neal are seeking millions of dollars in damages and lost payment for being demoted.
The suit, filed on Tuesday in McDonald’s hometown of Chicago, is the latest in a string of racial and sexual harassment cases against the company.