LOS ANGELES – 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.
"There is significant evidence that the carrying of breakfast sandwiches was not an issue of importance to Dunkin Donuts. It allowed other franchises in the area to refuse to carry any breakfast sandwiches at all, when merely relocating the stores, or in one case merely rearranging the displays, would have allowed them to carry the full line," Rovner wrote.
She added that "there is no evidence that there was any change in corporate policy, or even regional policy, on the matter."
A Dunkin' Donuts spokeswoman said she could not comment on pending litigation. Elkhatib could immediately be reached for comment.
Dunkin' Donuts is a unit of Dunkin' Brands, which is owned by private equity firms Bain Capital, Carlyle Group and Thomas H. Lee partners.