A discrimination lawsuit filed by a Muslim Dunkin’ Donuts franchisee who was not allowed to renew his contract with the chain because of a refusal to sell pork products can proceed, a U.S. appeals court ruled Tuesday.
The decision reversed an Illinois federal court judge’s 2004 ruling that rejected Walid Elkhatib’s argument that Dunkin’ Donuts discriminated against him based on his race by making the sale of breakfast sandwiches with bacon, ham or sausage a mandatory part of his franchise agreement.
According to court papers, Elkhatib, a Palestinian Arab, has been a Dunkin’ Donuts franchisee since 1979, before the company began selling any pork.
Once breakfast sandwiches were introduced in 1984, Elkhatib’s Chicago-area Dunkin’ Donuts outlets sold them without bacon, ham or sausage for nearly 20 years. The company did not object, even providing him with a sign that said “Meat Products Not Available.”
In 2002, however, Elkhatib was told he would not be able to relocate a store or renew his franchisee agreements due to his failure to carry the full product line.
Elkhatib sued Dunkin’ Donuts and its former parent company, Allied Domecq, later that year, claiming that the chain’s refusal to renew his franchises constituted racial discrimination.
In an opinion Tuesday, U.S. Circuit Judge Ilana Diamond Rovner wrote that because three other Dunkin’ Donuts franchisees in the area were allowed to continue operating without selling breakfast sandwiches for reasons other than the owners’ religious views such as space or lease restrictions, that there was sufficient evidence to take the suit to trial.
Walter Olson and his legal eagle commenters at Overlawyered take a closer look at the suit. A sample:
I’m not really commenting on the case overall, just the argument that because he was allowed to avoid serving pork in the past, that he should be treated the same now.
I find the argument ludicrous. The donut business is hitting hard times, people are not buying and eating donuts like they used to. Heck, even the mighty Krispy Kreme is having major problems.
To solve this downturn the donut business has been diversifying, e.g., selling iced coffees, bagels, sandwiches and soups.
Businesses do not operate in a fixed time. They have to be free to adapt to changing situations. To freeze a business in time makes absolutely no sense.
Posted by: Ima Fish | July 11, 2007 01:08 PM
I’m a bit confused by some of this legal discussion. As I understand the article, the current contract has run out and they needed t enter into a new one. DD felt that the previous allowance that they made to permit the exclusion of pork was no longer a profitable one for them to make.
I don’t know how long these franchise contracts run but DD has certainly stepped up the marketing of their non-pastry product since 2000. Is there evidence that they have since allowed this for other franchises where space was not a consideration?
If not, then it seems that the case is being made that you cannot change your mind about making an accommodation. This will certainly produce the result that far fewer will be made in the first place.
Posted by: OBQuiet | July 11, 2007 01:19 PM
But nevertheless, the pork is in the contract. While DD might have allowed this franchise to escape meeting its duty at some point in time, it does not mean that DD must allow this franchise to fail to meet contractual obligation for all time.
If we interpret contracts so strictly, that any deviation of the terms automatically and forever becomes new terms, then like other ‘zero tollerance’ policies, contracts will be enforced with an iron fist even if it is bad business for both parties, lest a new contract is written for them by the courts.
Getting away with violation of contract terms shouldn’t permit one to the right to get away with the same in perpetuity.
Posted by: nevins | July 11, 2007 01:32 PM
This commenter looks at the bigger picture:
I’ve been a student of Islam for some years now, and I’ve never understood the prohibition on eating pig products to extend to selling them. Handling them, yes, but contributing to others handling them, no.
He may have a right to sue, but this is an example of the creeping extremization of Islamic Law. It’s not like the pharmacists not wanting to sell plan B, where they could reasonably argue they’d be abetting a mortal sin if they did so. This is abetting nonbelievers doing something that’s not a sin by virtue of their being nonbelievers.
Posted by: jb | July 11, 2007 08:38 AM
This has nothing to do with the Dunkin Donuts lawsuit, but it’s food-related, so I’m tacking it on: The WSJ reports that the co-founder of Whole Foods Market used a sock puppet to diss his main competitor and tout his good looks:
In January 2005, someone using the name “Rahodeb” went online to a Yahoo stock-market forum and posted this opinion: No company would want to buy Wild Oats Markets Inc., a natural-foods grocer, at its price then of about $8 a share.
“Would Whole Foods buy OATS?” Rahodeb asked, using Wild Oats’ stock symbol. “Almost surely not at current prices. What would they gain? OATS locations are too small.” Rahodeb speculated that Wild Oats eventually would be sold after sliding into bankruptcy or when its stock fell below $5. A month later, Rahodeb wrote that Wild Oats management “clearly doesn’t know what it is doing …. OATS has no value and no future.”
The comments were typical of banter on Internet message boards for stocks, but the writer’s identity was anything but. Rahodeb was an online pseudonym of John Mackey, co-founder and chief executive of Whole Foods Market Inc. Earlier this year, his company agreed to buy Wild Oats for $565 million, or $18.50 a share.
For about eight years until last August, the company confirms, Mr. Mackey posted numerous messages on Yahoo Finance stock forums as Rahodeb. It’s an anagram of Deborah, Mr. Mackey’s wife’s name. Rahodeb cheered Whole Foods’ financial results, trumpeted his gains on the stock and bashed Wild Oats. Rahodeb even defended Mr. Mackey’s haircut when another user poked fun at a photo in the annual report. “I like Mackey’s haircut,” Rahodeb said. “I think he looks cute!”
The NYTimes found this gem:
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As one might expect, Yahoo’s message boards erupted with chatter about Mr. Mackey’s secret identity.
“In light of this news, perhaps the name of the company should be changed to Whole Foods Bazaar,” JimTarHeel wrote. “What a hoot! It’s so Nixonion! Maybe he needs some animal fat in his diet. I’ve known vegans who suffered from teeth and gum disease; now we know a vegan who’s suffering from ‘foot-in-mouth’ disease.”
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