Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, January 31, 1993 TAG: 9301310009
SECTION: BUSINESS PAGE: B-6 EDITION: METRO
SOURCE: By RONALD SMOTHERS THE NEW YORK TIMES
DATELINE: NASHVILLE LENGTH: Long
SETTLEMENT COMMITS SHONEY'S TO AFFIRMATIVE-ACTION PLAN
With federal court approval last week of one of the largest financial settlements in a race-discrimination suit, the Shoney's restaurant chain committed itself to a top-to-bottom transformation in its hiring and promoting of blacks.As part of the settlement, Shoney's Inc. will distribute $105 million over the next five years mostly to an estimated 10,000 blacks who either worked for or were denied employment by the company in the last seven years, according to Shoney's and terms of the settlement. 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 that 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 last 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 on 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 moderately priced 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 suggested in depositions, originated with Danner, 68. His approach to black employees was flagrantly racist, they said, accusing him of frequently using racial slurs when 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 original 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 upon 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 consent decree covers only the company-owned restaurants.
Kerry A. Scanlan, a lawyer with the NAACP Legal Defense and Education Fund who worked on the case, said one of the most significant aspects of the settlement was the program to seek out black applicants for entry-level positions, because Shoney's has historically promoted its managers from within the ranks.
"It is a field where you can, with little education and a lot of hard work, work your way up to a management job and make an extremely good salary," Scanlon said. "This is a part of our economy that is going to grow and where jobs will be secure."
Dewitt Nelson, one of the original plaintiffs, was dismissed from Shoney's in 1989 after four years' work in the kitchen. He said that although the settlement came too late for him to advance at Shoney's it "will let some other black people be promoted."
Terry Toney, who had managed one of the company-owned restaurants here and who is one of the whites likely to participate in the settlement, said he learned from Danner personally the company's attitude toward black workers.
Danner stated his "philosophy" of keeping the number of black employees in line with the proportion of black customers, Toney said in a recent interview. He added: "Shortly thereafter he fired me because I didn't do what he told me to and I didn't fire some black employees."
Danner, a former professional musician and tool and dye 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 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," Danner said in the deposition.