MCD McDonalds Corp

By Heather Haddon 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (January 8, 2020).

Two African-American executives at McDonald's Corp. sued the company alleging racial discrimination and civil rights abuses.

The suit, filed Tuesday in federal court in Illinois, comes as McDonald's new chief executive, Chris Kempczinski, works to address concerns about the burger giant's workplace culture. His predecessor Steve Easterbrook was fired in November after disclosing a consensual relationship with an unnamed McDonald's employee.

In the suit, Vicki Guster-Hines and Domineca Neal are seeking a monetary settlement following demotions that they say occurred as a result of discrimination and an allegedly hostile climate for black executives and franchisees at the Chicago-based company. McDonald's reduced the number of officer-level positions over the past five years as part of a company restructuring.

A McDonald's spokesman said 45% of the company's corporate officers are people of color, along with all of its 10 U.S. field vice presidents.

"While we disagree with characterizations in the complaint, we are currently reviewing it and will respond to the complaint accordingly," he said.

The suit names Mr. Kempczinski, Mr. Easterbrook and a U.S. regional president, Charlie Strong, in its allegations. Messrs. Kempczinski, Easterbrook and Strong didn't immediately respond to requests for comment.

Mses. Guster-Hines and Neal are employed by McDonald's but have taken leaves of absence related to the dispute, according to Carmen Caruso, one of the Chicago-based lawyers representing the women.

Mses. Guster-Hines and Neal, both senior directors working for McDonald's in Dallas, allege that they and other black executives have been routinely passed over for promotions, contributing to a lack of minority leaders at the company. The number African-Americans in the top ranks of McDonald's operations fell to seven last year from 42 in 2014, according to the suit.

The complainants allege that racial discrimination at McDonald's intensified after a new crop of executives joined the company in 2015. That was the year Mr. Easterbrook was hired as CEO. Mr. Easterbrook hired Mr. Kempczinski to the company that year and he later became U.S.A. president of McDonald's.

During a meeting last year, according to the suit, Ms. Guster-Hines expressed concern with the small number of African-American leaders at the company to Mr. Kempczinski and Melissa Kersey, a human-relations executive. Ms Kersey didn't immediately respond to a request for comment.

Mr. Kempczinski has told employees that diversity and gender balance are top priorities, and that measuring diversity among employees as a percentage is a better metric than absolute numbers. He has sought to have a diverse pool of officers in his own executive team.

Write to Heather Haddon at heather.haddon@wsj.com

(END) Dow Jones Newswires

January 08, 2020 02:47 ET (07:47 GMT)

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