Byron Allen, founder of Entertainment Studios, filed a lawsuit against McDonald’s, accusing the fast-food company of racial discrimination, seeking more than $10 billion in damages.
In a major development, a judge permitted the case to advance forward, empowering the media entrepreneur and his legal team to resume their battle with the company.
On Tuesday, U.S. District Judge Fernando Olguin ruled that McDonald’s may have violated civil rights laws by limiting Byron Allen’s networks to low-tier advertising categories and not working with Black-owned media.
In an order, the judge stated, “At a minimum, this is the type of case where the ‘trial court is permitted, in its discretion, to deny even a well-supported motion for summary judgement, if it believes the case will benefit from a full hearing.”
Byron Allen filed the lawsuit in 2021
Allen’s lawsuit, originally filed in 2021, claims that McDonald’s withheld advertising dollars from his companies, Entertainment Studios and the Weather Channel. Instead, the fast-food company directed Allen to an “African American tier” with a significantly smaller ad budget.
According to Allen, “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.”
As a result, Allen believes the action resulted in his media outlets losing millions of dollars in potential annual revenue. Therefore, he wants to hold McDonald’s accountable for the racial discrimination he believes his businesses endured.
McDonald’s responds in statement
Following the allegations, McDonalds released a statement denying Allen’s claims. The company explained that the decision stemmed from both parties’ inability to maintain a common ground.
“We are prepared to show that this case is utterly baseless. McDonald’s invested in media properties that aligned with the company’s business strategy and, like any other rational business, declined to invest in those that had low ratings or failed to reach the company’s target audiences.”
A history of discrimination litigation
In defense of its practices, McDonald’s argued that it evaluates media partners using objective criteria. The company claimed that Allen’s businesses did not meet its usual viewership threshold of 60 million. Furthermore, McDonald’s cited a “no news” policy that prevents it from advertising with The Weather Channel.
This is not the first time the fast-food company has faced accusations of racial discrimination. In 2021, McDonald’s settled with Herb Washington, a Black franchisee, for $33.5 million. Washington argued that the company’s discriminatory policies hindered Black store owners from thriving in prime locations. Moreover, this settlement followed another lawsuit settlement in which plaintiffs claimed McDonald’s favored white operators.