Byron Allen’s $10B Discrimination Lawsuit Against McDonald’s A judge in the United States has given McDonald’s Corp. an order to defend itself against the $10 billion lawsuit filed by media entrepreneur Byron Allen. The case claims that McDonald’s engages in “racial stereotyping” by not advertising with Black-owned media outlets.
U.S. District Judge Fernando Olguin in Los Angeles made a decision on Friday that said Allen could try to prove that McDonald’s violated federal and California civil rights laws by deeming his networks ineligible for the “vast majority” of its advertising dollars. The decision was made public on the Los Angeles court’s website.
Allen claimed that McDonald’s had demoted his company, Entertainment Studios Networks Inc., and the company that owns the Weather Channel, Weather Group LLC, to a “African American tier.” This meant that they would have to work with a different advertising agency and have a much smaller advertising budget. This would have resulted in a loss of tens of millions of dollars in annual revenue.
Byron Allen’s $10B Discrimination Lawsuit Against McDonald’s
Olguin noted charges that, from its formation in 2009, Entertainment Studios had tried repeatedly and unsuccessfully to get a contract from McDonald’s, whose “racist” corporate culture had injured Allen. This was done despite the fact that Olguin did not rule on the merits of the case.
“Plaintiffs have stated sufficient evidence to support an inference of purposeful discrimination,” Olguin ruled. “Taken together, and construed in the light most favorable to plaintiffs, plaintiffs have alleged sufficient facts to support an inference of intentional discrimination.”
Loretta Lynch, a lawyer for McDonald’s, issued a statement on Tuesday in which she maintained that the Chicago-based company viewed the lawsuit as “about revenue, not race,” and that she believed the evidence would show that there was no discrimination. Lynch made this claim in response to allegations that McDonald’s had racially discriminatory hiring practices.
“Plaintiffs’ baseless allegations ignore both McDonald’s legitimate business reasons for not investing more on their channels and the company’s long-standing business relationships with many other diverse-owned partners,” she stated. “Plaintiffs’ baseless allegations ignore both McDonald’s and McDonald’s legitimate business reasons for not investing more on their channels.”
In a statement, Allen referred to the case as being “about the economic inclusion of African American-owned enterprises in the economy of the United States.” McDonald’s extracts billions of dollars from African American customers but returns virtually nothing in return.
According to the lawsuit, African Americans make up forty percent of fast food customers, while McDonald’s spent only three point three percent of their advertising budget in the United States in 2019 on black-owned media.
McDonald’s made a commitment in May 2021 to increase its national advertising spending with black-owned media to 5% by 2024, up from its current level of 2%.
A U.S. judge has told McDonald’s Corp. to defend itself against Byron Allen’s $10 billion lawsuit, which says that McDonald’s is “racially stereotyping” Black people by not advertising with Black-owned media.
In a decision made on Friday, U.S. District Judge Fernando Olguin in Los Angeles said that Allen could try to show that McDonald’s broke federal and California civil rights laws by saying that his networks were not eligible for the “vast majority” of its advertising dollars.
Allen said that McDonald’s put his company, Entertainment Studios Networks Inc., and Weather Group LLC, which owns the Weather Channel, on a “African American tier” with a separate ad agency and a much smaller ad budget, which cost them tens of millions of dollars in annual revenue.
Olguin didn’t make a decision on the case’s merits, but he did say that Entertainment Studios had tried and failed many times since its founding in 2009 to get a contract with McDonald’s, whose “racist” corporate culture hurt Allen.
“Taken together and viewed in the way that is most favorable to the plaintiffs, the plaintiffs have alleged enough facts to support an inference of intentional discrimination,” Olguin wrote.
In a statement released on Tuesday, McDonald’s lawyer Loretta Lynch said that the Chicago-based company saw the lawsuit as “about revenue, not race” and thought the evidence would show that there was no discrimination.
“Plaintiffs’ false claims ignore both McDonald’s good business reasons for not investing more in their channels and the company’s long-standing business relationships with many other companies owned by people of different backgrounds,” she said.
McDonald’s has been told to deal with Byron Allen’s $10 billion discrimination lawsuit
Allen said in a statement that the case was about “the economic inclusion of businesses owned by African Americans in the U.S. economy. McDonald’s takes billions from African American customers and gives almost nothing back.”
The lawsuit said that Black people make up 40% of fast food customers, but McDonald’s only spent 0.3% of its $1.6 billion advertising budget in the U.S. in 2019 on media owned by Black people.
McDonald’s promised in May 2021 to spend 5% of its national advertising budget with Black-owned media by 2024, up from the current 2%.
McDonald’s has been told to deal with Byron Allen’s $10 billion discrimination lawsuit