Imagine if two of your Motel 6 hotels in Phoenix were the sites of at least 20 arrests by Immigration & Customs Enforcement or ICE, between February and August this year, as the Phoenix New Times reported in September.
And suppose management at the corporate-owned hotels didn’t respond when asked to comment, according to the newspaper, but employees told the newspaper it was routine to report names. "We send a report every morning to ICE—all the names of everybody that comes in. Every morning at about 5 o’clock, we do the audit and we push a button and it sends it to ICE," said one unnamed front desk clerk.
You’d have a problem, which G6 Hospitality, the owner of Motel 6, acknowledged after a brief but damaging Twitter tsunami—the common theme that ties together all three stories in this column. Read them and consider how your brand would respond if landing in a similar storm.
The folks at G6 declined my request for an interview, but issued a statement on September 15 saying the actions were "undertaken without the knowledge of senior management. When we became aware of it, it was discontinued."
The company "will be issuing a directive to every one of our more than 1,500 locations nationwide, making clear that they are prohibited" from the practice. "Protecting the privacy and security of our guests are core values of our company. Motel 6 apologizes for this incident."
Many on Twitter supported Motel 6 employees for cooperating with ICE. "Love you, Motel 6. Keep it going!" said one, while others urged a boycott and alerted friends to not stay there if they were undocumented.
At least one man in Phoenix, attorney Robert McWhirter whose client was arrested at a Motel 6, was less than impressed with Motel 6’s response, telling the Phoenix New Times, "I’ll tell you one goddamned thing for sure—I’m not staying at a Motel 6 from now on."
A discriminating case
The weekend of September 22-24 is now famous for the Twitter attack by President Trump against the NFL and team owners who don’t fire their players who sit or kneel for the national anthem. By coincidence, a prominent franchisee attorney, Jerry Marks of Marks & Klein, thinks the national attention will help his client’s case. "With what’s going on now with the NFL, it’s very timely," he told me September 26, the day he filed a lawsuit in U.S. District Court in Maryland that he hopes will gain national attention.
The plaintiff, Nance Pretto Simmons, is a franchisee claiming "systematic racial discrimination by Dunkin’ Donuts against its own franchisees, specifically those who are African American women" in violation of the Civil Rights Act.
The complaint adds a second punch: a coupon saying "Dunkin’ Discriminates" and urging people via social media not to buy Dunkin’ products.
Dunkin’ Brands Group sent a statement, which read in part: "Dunkin’ Brands categorically denies the allegations of discrimination set out in Ms. Pretto Simmons’ complaint and will vigorously defend ourselves against them through the court process, on legal grounds and on the merits."
Complicating the case for Dunkin’ is the NAACP, which is getting in on the act. "This is very important to us," said June Dillard, legal redress chair for the state NAACP chapter in Maryland, which will lend assistance, as yet unspecified, to the lawsuit. "Our mission is to eliminate discrimination, and diversity in franchising is long overdue…I am not new to the idea that the franchisors have difficulty contracting with minorities and women."
Dillard said when viewing Dunkin’s website, "they talk about diversity and inclusion, but they only talk about it at the workforce level. It doesn’t say anything about the diversity of the franchisees. We feel in 2017, that should be a given. We’re still having to fight discrimination at every level."
In its statement, Dunkin’ Brands said it will "continue working with our partners in the NAACP and MinorityFran Committee of the International Franchise Association to provide opportunities for individuals of all backgrounds to join our franchise system."
Marks said the lawsuit’s purpose is "remedial, which means we want the wrong corrected," and he added an emotional coda—the kind of message that’s been flying around with the NFL kneeling controversy.
"At the heart of all franchising is the fact that you’re giving people an opportunity to succeed in business. If you foreclose a particular category of people, that’s wrong, that’s anti-American."
An angry inch
Corporate defendants who feel bullied into a settlement by what they deem a frivolous lawsuit by the plaintiffs’ bar—this one’s for you. Remember that case starting in 2013, in which an Australian teenager measured a Subway footlong and found it was only 11 inches? The story went viral, and lawyers filed nine class-action suits around the United States, later consolidated into one.
A lower court in 2016 approved a settlement under which Subway pledged to ensure its baking practices resulted in footlong sandwiches not short by an inch. I can picture the hoops that were jumped through in order to get there.
But this past August, 7th U.S. Circuit Court of Appeals Judge Diane Sykes called the settlement "worthless" and "no better than a racket," and threw it out, including the part in which plaintiffs’ attorneys were to collect $520,000 in fees, while the 10 named plaintiffs would each receive a mere $500.
"A class action that seeks only worthless benefits for the class and yields only fees for class counsel is no better than a racket and should be dismissed out of hand," Sykes wrote for a three-judge panel. "That’s an apt description of this case."
One of the attorneys who defended Subway, Bethany Appleby, was at Wiggin & Dana for much of the fight but now is chief legal officer at Subway. No doubt she’s enjoying eating a Subway sandwich from time to time, but without having to whip out her tape measure.
Beth Ewen is editor-in-chief of Franchise Times, and writes the Continental Franchise Review® column in each issue. Send interesting legal and public policy cases to firstname.lastname@example.org.