McDonald's Latest: DEI Cuts & a $10B Racial Discrimination Lawsuit

And What You Need To Know About McDonald's Black Investments

Jan 07, 2025

Say it together 🗣️ “WE AIN’T GOT MCDONALD’S MONEY!”

McDonald’s is the latest to cut back key DEI initiatives, announcing it will:

Retire aspirational representation goals to focus on embedding inclusion in daily operations.
Pause external surveys to prioritize internal growth initiatives.
Replace the Supply Chain DEI pledge with integrated discussions on inclusion tied to business performance.
Rename the Diversity Team to the Global Inclusion Team to better reflect its mission.

This shift mirrors broader trends across corporate America, where companies like Walmart and Nissan (yes, ALTIMA, Nissan! #1 vehicle among African American buyers, NISSAN) have also scaled back equity-focused initiatives under scrutiny from conservative advocates and legal challenges.

McDonald’s says it will continue to publish demographic data in its annual impact report, including metrics on workforce representation, supplier diversity, and pay equity. Yet, it still raises doubts about the company’s willingness to uphold tangible commitments to equity, particularly in light of its broader history with Black communities.

What history, you say? We don’t even have to go too far back. There’s a $10 Billion racial discrimination lawsuit happening RIGHT NOW….

Most recently, media mogul Byron Allen filed a $10 billion racial discrimination lawsuit against McDonald's that is going to trial. The lawsuit, filed in 2021, claims McDonald's relegated Black-owned media outlets, including The Grio and The Weather Channel, to an "African American tier" of advertising. (Translation: a much smaller budget to compete for ad dollars, while the “general market” got the supersized deals.)

Allen is also calling for McDonald’s CEO Chris Kempczinski to step down, citing controversies over allegedly racist text messages.

McDonald's denies the allegations, calling the lawsuit "utterly baseless" and claiming its ad decisions were based on business strategy, ratings, and target audience alignment.

But let’s be real—when our neighborhoods are flooded with McDonald’s and void of healthy, affordable food options, they don’t need to spend a lot to advertise. They’ve already got us locked in.

McDonald’s has long courted Black communities. They’ve placed restaurants in our neighborhoods, created ads that tap into our culture…

mcdonalds

A post shared by @mcdonalds

…and even dropped those legendary R&B-inspired jingles, like this one…

And this one (s/o to Dwele!)…

But the love hasn’t always been mutual, and Byron Allen isn’t the only one with receipts. The fast-food giant has faced multiple lawsuits from Black franchise owners and executives over systemic issues. Allen sums it up:

"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"

52 Black Franchise Owners Sue in 2020

McDonald's has long marketed itself as a community-oriented brand, especially in predominantly Black neighborhoods. However, many Black franchise owners have alleged that the company steered them into less profitable locations, limiting their ability to grow and compete with their white counterparts. In 2020, 52 Black franchise owners filed a $1 billion lawsuit against the company, accusing McDonald's of racial discrimination and unfair business practices.

Herb Washington’s 2021 Lawsuit

ON TOP OF THAT, former Major League Baseball player and McDonald’s franchise owner Herb Washington filed his own lawsuit in 2021, alleging that McDonald’s systematically pushed Black franchisees into less profitable locations. Washington, who once owned 27 McDonald’s locations, claimed that over time, McDonald’s forced him to sell stores to white owners while denying him opportunities to grow his business.

He said that McDonald’s created a system where Black franchisees were “set up to fail,” while their white counterparts thrived. McDonald’s settled the case in 2022 for $33.5 million but denied wrongdoing, calling the allegations “meritless.”

Black Executives Speak Out

In 2021, two Black executives sued McDonald's, alleging a "hostile work environment" and discriminatory practices that excluded them from promotions and meaningful opportunities. These claims align with broader critiques that McDonald's has failed to adequately support Black employees, despite benefiting from their labor and insights.

Beyond racial discrimination, here’s a quick look at McDonald’s by the numbers in other key areas that impact Black economic advancement*:

2023 Black Representation:
- Total Black Workforce: 19% (Hispanic: 32%)
- First/Mid Level Officials and Managers: 12% (Hispanic: 19.8%)
- Executive/Sr. Level Officials and Managers: 12.5% (Hispanic: 8%)
- Corporate Leadership: 7.7%
- Board of Directors: 16.7%
2023 Black Franchise Ownership: 12%
2023 Supplier Diversity:
- Supplier Diversity Spend: $15.6 billion (26.2% of total Supplier Spend)
- Black Supplier Spend: $639.6M (4.1% of total Supplier Diversity Spend, -2.3% from 2022)
- Black Media Spend: 4.6% of Total Diverse-Owned Media (13.4% of their total media spend)

The Disparities in Black vs. Hispanic Economic Inclusion in McDonald’s practices show a troubling pattern:

Workforce: McDonald’s hires more Hispanic workers (32% of the workforce) compared to Black workers (19%). Yet both groups are underrepresented in leadership, with Black professionals making up only 7.7% of corporate leadership roles.
Supplier Diversity: Hispanic suppliers receive 15.1% of the supplier diversity spend, while Black suppliers are relegated to just 4.1%, a glaring disparity that undermines economic inclusion.
Media Spend: Corporations like McDonald’s are willing to spend relatively more on Black advertising to leverage cultural influence and drive sales; However, their unwillingness to match that investment in supplier diversity, franchise ownership, or leadership opportunities reveals a broader pattern of economic exploitation:
- Black consumers are seen as profitable targets, not partners.
- McDonald’s is willing to increase their Black-owned (and women-owned) media spending YoY, while decreasing their Black (and women) Supplier Diversity spend.
- The investment in Black-owned media, while slightly larger than Hispanic-owned media, is still minuscule when compared to McDonald’s overall advertising spend.

This is why we need to end the use of terms like “POC” and “BIPOC,” but that is a conversation for another day.

Byron Allen’s case against McDonald’s isn’t just about one media mogul and one company—it reflects a larger struggle for economic inclusion and equity. Black-owned media outlets have historically been overlooked in advertising budgets, which impacts their ability to thrive, serve their communities, and control our own narratives.

As Revolt CEO Detavio Samuels said at the inaugural Blackweek Conference:

We have to allow the people from in a community to program their own community versus looking at them from the outsider perspective and telling them what that is.

Support for our community must go beyond marketing and jingles—it requires equitable opportunities for Black franchisees, employees, media partners, AND consumers. Between Byron Allen, Herb Washington, and lawsuits from Black executives alleging workplace discrimination, McDonald’s has faced repeated accusations of failing to live up to its promises of equity and inclusion. And now, the cherry on top: caving to far-right attacks and cutting key DEI initiatives.

These cases underscore a pattern: brands knows how to leverage Black culture for profit, but they still ~~struggle~~ refuse to share the wealth.