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2013 Ethisphere Most Ethical Companies

The Case of McDonald’s: Corporate vs. Personal Responsibility

I have been a frequent critic of businesses and business practice in my ethics sage and workplace ethics blogs so to be fair I am devoting this blog to the 2013 Ethisphere Institute’s “Most Ethical Companies around the World.”

The Ethisphere Institute is a think-tank organization that focuses on business ethics, corporate social responsibility, anti-corruption and sustainability.  Since 2007, Ethisphere has published a list of the world’s most ethical companies. In 2013, the list includes 140 companies including 43 international companies.

Of the 140 businesses recognized, 23 have received this honor every year since the list was first published including Aflac, American Express, General Electric, Patagonia and Starbucks.

Starbucks was the only company in the restaurants and cafes category to make the list this year. The last time another restaurant or cafe was recognized as one of the world’s most ethical companies was in 2009 when McDonald’s joined Starbucks on the list.  

The way the process works is a responsible employee, such as one in charge of corporate social responsibility, corporate governance, compliance and/or ethics, completes a questionnaire nominating a company. Ethisphere then look for signs of “ethical business leadership” including:

  • Companies that proactively engage with the communities in which they serve, impact, or operate
  • Companies that invest in innovation, quality and sustainable business practices that reduce resource consumption in the production or use of their products and/or increase consumer health or safety
  • Companies that leverage relative positions of influence to affect positive industry change
  • Companies that look strategically to profit fairly from such ethical leadership business practices, as ultimately only profit ensures continuance of desired institutional behavior.

Ethisphere does have some checks and balances in deciding on those that make the list including whether a member of leadership was named in a class-action lawsuit, was under government investigation or was a defendant in a serious civil action. These must be disclosed to Ethisphere.

I agree with Ethisphere on the ranking criteria and applaud the Institute for its efforts to improve ethical leadership of companies around the world. Ethical business practices don’t just earn a business a spot on Ethisphere’s list of the World’s Most Ethical Companies, these practices can also help in the long-term success of a business.  Companies that are committed to the standards set by the Ethisphere Institute are likely to attract and retain the most talented employees.  

I also applaud Ethisphere for removing McDonald’s from the list after one year. While it was a long time ago, we all remember the 1994 product liability lawsuit (Liebeck v. McDonald's Restaurants) known as the McDonald's coffee case. It became a flashpoint in the debate in the U.S. over tort reform after a jury awarded $2.86 million to Stella Liebeck, who suffered third degree burns in her pelvic region when she spilled hot coffee. The jury damages included $160,000 to cover medical expenses and compensatory damages and $2.7 million in punitive damages after finding the coffee was hotter than industry standards allowed. The trial judge reduced the final verdict to $640,000, and the parties settled for a confidential amount.

More relevant is a number of lawsuits filed against McDonald’s for health and employment conditions. Some of the cases are laughable but some may be legitimate.

On March 14, 2013, a lawsuit was filed against McDonald’s alleging that a child ate a used condom he found in the play area of one of the chain’s Chicago restaurants. The suit was filed on behalf of Anishi Spencer and her two sons, who were 3 and 2 years old at the time of the alleged incident in February 2012. This suit sounds a bit strange to me although it can’t be dismissed without a full hearing of the case. One would think, for example, that if the child became ill as a result of eating the condom and he went to an emergency room for treatment, the claims can be verified. Although I am not that naïve as to think the condom might have been placed in the playground by Spencer as a way to cash out on McDonalds’ desire to avoid bad publicity.

Then there is Shelley Lynn, who sued McDonald’s on March 28, 2012, along with her ex-husband, Keith Handley, and his restaurant company, Ivernia, in federal court in California. She claims that she met her ex while working the counter at McDonald’s, but that she was soon forced into working as a hooker. According to Lynn’s complaint, McDonald’s “failed to conduct a due diligence into the moral character of Handley when it sold franchises to him.”

Lynn claims McDonald’s “failed to properly supervise and train Handley, as a direct result of which Handley used his position as an employer and conspired with his corporation Ivernia to coerce and bribe two of Ivernia’s employees to make false statements against Lynn during Handley’s dissolution and to suppress relevant evidence he had disclosed about himself. Handley also engaged in pimping operations out of the McDonald’s franchises he owned,” according to the complaint.

On June 28, 2012, Marquita Thompson, who worked at a Chicago McDonald's, filed a lawsuit against franchisee DKA Enterprises LLC for circumstances surrounding her termination. Thompson claims she complained to restaurant management on several occasions that she believed the restaurant was in violation of Illinois public health related policies because of insect and vermin infestations in the restaurant. She was subsequently terminated. This is a serious matter as it may implicate McDonald’s in a whistleblower’s lawsuit.

Thompson alleges she made repeated verbal complaints and reports to her superiors – including the restaurant's general manager – about unsafe and unsanitary conditions around the restaurant's food storage and preparation areas and the employee break room. She claims she was informed by management that they would "take care of it."

The defendants have admitted in their court filings that Thompson had, in fact, informed the general manager of her concerns about the situation.

On or about June 25, 2010, Thompson claims she reported to the general manager that she saw a cockroach on her own salad. She believes this angered her general manager and claims she was fired shortly thereafter.

This was the second time in less than a year that a complaint has been filed against a McDonald’s franchise held by an entity owned by Darrell Winbush and Katina Winbush. Another complaint was filed against MRA Restaurants LLC, owned by the Winbush's, in late 2011, by former employee Melondy Paul, who alleges that she was berated and then terminated after informing restaurant management she was pregnant. If true, this could lead to a wrongful termination lawsuit against McDonald’s.

Finally, on July 23, 2002, a lawsuit was filed against McDonald’s and other fast food chains (Caesar Barber v. McDonald’s Corporation, et. al.)  seeking damages for the medical conditions of Barber brought on by consuming these corporations’ products. This case was dismissed in 2003 “without prejudice,” but never refiled. I put this lawsuit in the ridiculous category because it contends that a restaurant could be responsible for the physical condition of an unhealthy person. This case, and the hot coffee case, raise excellent ethical questions about one’s personal responsibility to make healthy decisions versus a “nanny state” mentality.

The bottom line is we live in a litigious society and each of us has to look deep inside our soul before bringing a lawsuit against any company for selling an “unsafe” product that we choose to use or eat all the while aware that it may cause health issues for us down the road.

I end this blog like so many with a quote by a famous person. In this case it is by Eleanor Roosevelt, the wife of former President Franklin Delano Roosevelt.

“In the long run, we shape our lives, and we shape ourselves. The process never ends until we die. And the choices we make are ultimately our own responsibility.”

Blog posted by Steven Mintz, aka Ethics Sage, on April 3, 2013