Matthias Schrader/AP Photo
A McDonald's flag is seen in Germany in 2017.
In 2020, after the murder of George Floyd and the mass protests that followed, a number of companies promised change within their own ranks, vowing to create more equitable policies. Some businesses commit to racial equity audits to jumpstart internal reforms. These audits, often conducted by outside firms or individuals, examine and assess company actions and how those actions advance or prevent discrimination within their workplaces.
Some of the highest profile companies to authorize these examinations, which are also known as civil rights audits, include Starbucks, Facebook and Airbnb. Starbucks hired former Attorney General Eric Holder to conduct a racial equity audit following an incident in which a Philadelphia store manager called the police on two Black men after a barista told them only buying customers could use the bathroom.
McDonald’s is next in line for closer scrutiny. At a shareholders meeting on May 26, the group took a non-binding vote asking the burger giant to conduct an independent racial equity audit. The vote, which won the support of 55 percent of voting shareholders, comes after lawsuits that have been filed by many Black franchise owners and operators complaining that they have been relegated to low-sales locations. Another group of litigants allege that a Wisconsin franchise manager would not hire Black job applicants.
One of the most persistent voices calling for an audit has been the SOC Investment Group, an advisory body which oversees pension funds for the Strategic Organizing Center, a coalition of four unions, the Service Employees International Union, International Brotherhood of Teamsters, Communications Workers of America and United Farmworkers of America. Together they hold 2.5 million McDonald’s shares. The group pushed McDonald’s to recoup a severance package that McDonald’s former CEO received after he was fired for sexual harassment last year.
The SOC Investment Group’s executive director Dieter Waizenegger says that while McDonald’s claims it is committed to diversity, equity and inclusion and has promised to disclose information about how they are meeting commitments to these values, that has yet to happen. What led the shareholders’ file their proposal, Waizenegger says, is the “frustration that it’s taking the company a long time to come before with the shareholders on these topics.”
Waizenegger is under no illusion that the audit is the solution to workers’ challenges. He says the audits are a way for the company to go beyond posting social justice mottos on social media and actually think through civil rights implications in the workplace.
Unfortunately, there is little reason to believe that the audit will be conducted as a good-faith exercise. Marcia Chatelain, a Georgetown University professor of history and African American studies, says there is little substance behind McDonald’s current diversity, equity and inclusion goals: The Chicago-based company made philanthropic donations to organizations like the NAACP and the National Urban League but it consistently fails to implement any real structural changes for the rank and file workers. She adds that
McDonald’s has confined its promises to raise wages to company-owned stores, which affect a small segment of its workers. Company-owned stores accounted for only 7 percent of all operating McDonald’s stores in 2020.
Davis says that companies prefer to investigate something more difficult to pin down: the workplace culture.
“Traditionally, McDonald’s has dictated many aspects of how franchisees run their restaurants,” Chatelain says. “But when it comes to issues of justice, in terms of worker issues, paid leave and the investigation of sexual harassment, they say that’s up to the individual franchise owners to manage those issues.”
Chatelain, author of Franchise: The Golden Arches in Black America, a history of fast-food companies’ relationships with local communities, says that as long as McDonald’s leaves it to individual franchise owners to manage workers without the support and resources of the McDonald’s corporation, the most the public receives are anecdotes about good franchise owners, rather than a chain-wide system that protects and fairly compensated workers.
There’s a broader question, though, about the efficacy of these audits. Jerry Davis, a University of Michigan business administration and sociology professor, argues that one problem common to many audits is that companies must collect demographic information about their employees, but do not publicly release it—which is precisely what auditors need to look at to determine if a company is promoting or not promoting women or employees from marginalized backgrounds. This demographic information is required for annual reports to the Equal Employment Opportunity Commission. If companies chose to release this information, their employees would start asking questions.
“Employees that worked there would be looking at this stuff and saying, ‘wait a minute, how come all the managers are white guys and yet most of the employees are women or people of color,’” Davis says.
Instead of focusing on these easier-to-collect, but more-damning numbers, Davis says that companies prefer to investigate something more difficult to pin down: the workplace culture. Executives want workers to ask questions about their daily experiences: Are they encountering microaggressions, racist messages in workplace group chats, or instances of harassment in the workplace? These questions are harder for larger firms to investigate in a systematic way, particularly for a company with franchises.
When asked to comment on the audit and what third party group they were hiring to conduct it, a McDonald’s spokesperson noted in a statement to the Prospect: ““Diversity, equity, and inclusion are at the heart of McDonald’s core values. We are committed to providing equitable opportunities for our employees, franchisees, and suppliers. While we are proud of our progress, our efforts are ongoing, and we will continue to focus on actions that have meaningful impact. Consistent with these efforts, we have engaged a third party to conduct an assessment.”
Harvard sociology professor Frank Dobbin criticizes the practice of having outside firms performing the audits. The outsourcing of the examination, he says, may mean that no designated company official or officials will be committed to change company policy once the audit is over.
Dobbin, whose work has focused on corporate-ran diversity programs, says companies usually focus on diversity and harassment training in their audits. He says those training sessions rarely “move the needle.” What companies need to change is the way they hire and promote individuals. “Typically, they change the things that don’t matter,” Dobbin says. “Because it’s easier, because there’s less pushback.”
If that is the McDonald’s strategy, it is hardly an outlier in corporate America. It is not uncommon for firms to make a public statement committing the company to whatever cause is popular, but then quietly drop that commitment once the issue fades from public view. Dobbin believes that companies should focus on recruiting students from historically Black colleges and universities or Latino-serving institutions if they want to bring more managers of color into workplaces.
Georgetown’s Chatelain notes that the only way for McDonald’s to make a genuine commitment to racial justice would start with the basic concerns of its rank and file restaurant workers, who are disproportionately likely to be Black and brown women. The company needs to be serious about wages, benefits and worker safety. “Make a commitment to a living wage, benefits for all employees, paid sick leave and tuition reimbursement, and ensure that their colleagues in the fast-food industry do the same,” Chatelain says.
