Bias case settlement compels Shoney's to aid blacks

January 31, 1993|By Ronald Smothers | Ronald Smothers,New York Times News Service

NASHVILLE -- With federal court approval last week of one o the largest financial settlements in a race-discrimination suit, the Shoney's restaurant chain committed itself to a transformation in its hiring and promoting of blacks.

Shoney's Inc. will distribute $105 million over the next five years, mostly to about 10,000 blacks who either worked for or were denied employment by the company in the past seven years. Some white employees who were dismissed for not following orders to dismiss blacks will also receive money.

Shoney's, which is based in Nashville and has more than 30,000 employees nationwide, did not admit wrongdoing. But its settlement, described by lawyers and industry analysts as one of the largest in a racial discrimination suit, spares the publicly held company a drawn-out trial.

Taylor J. Henry Jr., Shoney's chairman and chief executive, said the company was changing even before the settlement. "The suit focused our priorities on doing what is right," he said. "We are a changed company, and we regret any mistakes we made in the past."

The settlement, tentatively reached in November, was negotiated by the company, private lawyers and the NAACP Legal Defense and Educational Fund, which represented the employees as a class. Judge Roger Vinson of Federal District Court in Pensacola, Fla., approved it Monday.

The suit, filed in 1989 by several Shoney's employees in Pensacola, charged that the chain's founder and former chairman, Raymond L. Danner, ordered managers to dismiss blacks when he believed that there were too many employed at a particular restaurant and that he once offered to match any employee's contribution to the Ku Klux Klan.

At the heart of the suit were charges that for more than 20 years, the chain of family restaurants deliberately shunted blacks into low-paying, low-visibility kitchen jobs, when it hired them at all, and clearly showed a preference for white servers, cashiers and managers.

That atmosphere, several former employees said in depositions, originated with Mr. Danner, 68. His approach to black employees was racist, they said. The former employees accused him of using racial slurs in referring to such workers.

The settlement, which covers the period from Feb. 4, 1985, to Nov. 3, 1992, could mean as much as $100,000 each to some plaintiffs. The amounts for others will depend on how long they worked for Shoney's or how many times they applied for employment or promotions and were denied.

In addition, the settlement calls for the company to embark on an aggressive affirmative-action program in hiring and promotions over the next 10 years. The plan sets goals that the company must reach in staffing its 759 company-owned restaurants. It envisions blacks accounting for 20 percent to 23 percent of managers and assistant managers and three of the 25 regional directors by 1998.

The company owns or franchises 1,803 restaurants in 36 states under the names Shoney's, Captain D's, Lee's Famous Recipe Chicken, The Fifth Quarter and Pargo's. The settlement covers only the company-owned restaurants.

Mr. Danner, a former professional musician and tool-and-die maker, grew up in humble circumstances in Louisville, Ky., and built the company from a single Shoney's Big Boy restaurant in Nashville in 1959 into a $1-billion-a-year business.

Shoney's said Mr. Danner would not comment on the settlement, but according to his own deposition in the suit, he was not shy about sharing his theories about hiring blacks.

"I have on occasion given my opinion that a possible problem area was that the specific store in question had too many black employees working in it as compared to the racial mix of the geographical area served by the store," Mr. Danner said in the deposition.

According to a deposition by Mike Vinson, a manager of Shoney's restaurants in the Prattville, Ala., area, managers with what were considered too many black employees were often told with a wink that it was "too cloudy" in the restaurant and were directed to "lighten it up some." At other times, a white manager, Daniel Gibson, said in his deposition, Mr. Danner was more blunt, saying, "I don't like niggers, and I don't want to see them in my stores."

Lawyers for the plaintiffs said blacks accounted for 38.6 percent of Shoney's kitchen workers in 1989, 8.4 percent of servers, 3.7 percent of midlevel managers and trainees, and 1.8 percent of managers.

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