McDonald’s to Pay Washington $33.5 M in Lawsuit Settlement

YOUNGSTOWN, Ohio — McDonald’s Corp. Thursday settled a racial discrimination lawsuit filed by Youngstown-based franchisee Herb Washington and his company, HLW Fast Track Inc.

Under the deal, the fast-food giant will buy out all 13 of Washington’s franchises in northeastern Ohio and western Pennsylvania for $33.5 million, according to a statement from McDonald’s. Washington agrees to drop his suit and exit the McDonald’s system as part of the agreement.

The civil suit was filed in February in the U.S. District Court in Ohio, Northern Division. In it, Washington charged that McDonald’s USA LLC is trying to eliminate Black franchisees from its system. 

Washington is a former college track star who played baseball for the Oakland Athletics in 1974.

“The court did not find that the company violated any laws,” McDonald’s said in a statement. “Discrimination has no place at McDonald’s. While we were confident in the strength of our case, this resolution aligns with McDonald’s values and enables us to continue focusing on our commitments to the communities that we serve.”

To illustrate the consequence of what he claims was the corporation’s systematic racism, Washington said at the time he filed his suit that there were 377 Black franchisees in 1998, but only 186 today.

The company “may look like a multicultural Mecca from the outside but their playbook includes redlining [against potential franchisees],” Washington told reporters when he filed his lawsuit. “When I stood up to them, they began dismantling my life’s work.”

Washington was once the largest Black franchisee in the McDonald’s system, with 27 stores. He claimed he was forced by McDonald’s to sell seven franchises in the past three years and lost the others over the years through closures or other means

In response to the suit, McDonald’s USA claimed in February the situation is the result of “years of mismanagement by Washington.” The chain said Washington’s organization “has failed to meet many of our standards on people, operations, guest satisfaction and reinvestment. His restaurants have a public record of these issues, including past health and sanitation concerns and some of the highest volumes of customer complaints in the country.”

The locations of Washington’s franchises were in Austintown, Youngstown, Mineral Ridge, Poland, Cleveland, Newton Falls, Sharon, Pa., Greenville, Pa., and Hermitage, Pa.

A discrimination lawsuit brought by two Black franchisees in Tennessee was settled last week, according to published accounts. That agreement followed an announcement by McDonald’s that it would recruit and train more diverse franchisees.

Pictured at top: Herb Washington.

Copyright 2024 The Business Journal, Youngstown, Ohio.