Pork at issue in doughnut franchise row

The lawyer invoked a Reconstruction-era law, which was enacted to protect freed slaves after the Civil War. It provides that "all persons … shall have the same right … to make and enforce contracts, as is enjoyed by white citizens."

The Chicago Tribune
August 1, 2007

Pork at issue in doughnut franchise row
Discrimination claimed in lawsuit as Muslim proprietor is threatened with loss of business
Ameet Sachdev

Every day for nearly 30 years, Walid Elkhatib has sold doughnuts. Glazed, chocolate frosted, Bavarian Kreme and other varieties. As a Dunkin' Donuts franchisee, he expanded the menu to include breakfast sandwiches, such as egg and cheese bagels.

But he drew the line at serving sandwiches with sausage, ham or bacon because his Muslim faith forbids him from eating or handling pork — a departure from company policy that led Dunkin' Donuts in 2002 to threaten it would take away his two Chicago-area franchises.

So for five years Elkhatib has been waging a legal battle against the Boston chain claiming racial bias, not religious discrimination. The federal court of appeals in Chicago last month reinstated the case, blurring the lines between religion and race.

"What is life without dignity and your beliefs?" said Elkhatib, a 57-year-old Arab who was born in Jerusalem and came to Chicago in 1971.

Elkhatib's case highlights the ongoing challenges businesses face in dealing with increasingly diverse workplaces. For instance, Islamic dietary restrictions, dress and grooming requirements and the five-time-daily prayer vigil have become sources of friction.

Muslims have filed thousands of complaints of workplace discrimination in recent years, according to the Council on American-Islamic Relations. In one high-profile case in 1999 the federal courts found that the Newark Police Department's no-beard policy discriminated against two Muslim police officers. Companies have become more accommodating of the religious practices of Islamic workers, setting aside quiet rooms for prayer and allowing women to wear the hijab, or loose-fitting clothing that includes a head covering.

For years Dunkin' Donuts made exceptions for Elkhatib, even providing him signs for his restaurants that read "No meat products available," he asserts in court documents.

The company introduced breakfast sandwiches in 1984, five years after Elkhatib bought his first franchise, which he later sold.

"That's why I bought a Dunkin' Donuts, because I never had to handle pork or alcohol [also forbidden under Islamic dietary laws]," said Elkhatib, who drove a bus before going into business for himself.

In 1995 he opened his second franchise in west suburban Berkeley, and three years later followed up with one in Westchester. His total investment in those two restaurants was $580,000, court documents said.

His franchises consistently received positive reviews for cleanliness, hospitality, marketing and product quality. His supervisors raised no objections to his refusal to sell pork sandwiches, he said in court filings.

But Dunkin' Donuts reversed course in 2002, Elkhatib said. That year, according to court papers, he had discussions with the corporate real estate group about the possibility of relocating his store in Westchester to a busier intersection. But the company later rejected the plan when Elkhatib refused to sell breakfast sandwiches with pork at the new location.

In August a company lawyer followed up with a letter telling Elkhatib that his two franchises would not be candidates for renewal when those agreements expired. Dunkin' Donuts said in court papers that the decision was made because company policy "requires franchisees to sell the complete line of approved Dunkin' Donut products."

A company spokesman declined to comment for this story because the case is pending.

Elkhatib turned to a friend, Robert Habib, a Chicago lawyer who regularly stopped by his store for coffee and conversation. Habib said he quickly realized he did not have a typical discrimination case on his hands.

Not an employee
Because Elkhatib is not an employee of Dunkin' Donuts, Habib could not sue under federal laws banning religious bias in employment. Instead, Habib alleged discrimination based on race, claiming that because Elkhatib is Arab he is forbidden from handling pork products because of his race's traditions and religious practices. The lawyer invoked a Reconstruction-era law, which was enacted to protect freed slaves after the Civil War. It provides that "all persons … shall have the same right … to make and enforce contracts, as is enjoyed by white citizens."

"If Walid had been an employee this would have been a lot simpler case," Habib said.

African-Americans franchisees of other retail chains have sued under the same law when they were denied opportunities to expand their business in predominantly white areas, said Carmen Caruso, a franchise lawyer at Schwartz Cooper in Chicago.

"The law puts the onus on the franchisor to get into real reasons why you made distinctions between franchisees," Caruso said.

Dunkin' Donuts, in a request to dismiss the case before trial, argued that it did not discriminate by refusing to accommodate Elkhatib's "racial, or religious, preferences."

"A Dunkin' Donuts franchisee can no more refuse to sell breakfast sandwiches based on the Muslim faith, or Arab ancestry, than a McDonald's franchisee can refuse to sell hamburgers because they are Hindu or Indian," the company said in court papers.

U.S. District Judge Charles Norgle found no evidence of racial discrimination by Dunkin' Donuts. He also rejected the Elkhatib's attempt to frame his case on a racial claim rather than a religious one, finding that "dietary restrictions Elkhatib points to are associated with religion rather than race." Claims of religious discrimination are not recognized under the civil rights law Elkhatib invoked.

However, the 7th Circuit Federal Court of Appeals allowed the complaint to proceed as a racial discrimination case and did not address Norgle's determination that the suit was a religious rather than racial claim. The company did not ask the 7th Circuit to uphold Norgle's ruling on that basis.

Different reasons
The three-judge panel found troubling evidence that the company did not consistently apply its rules on franchise holders. At least three other Chicago-area Dunkin' Donuts restaurants also do not serve breakfast sandwiches with pork.

The reasons are different from Elkhatib's — lease restrictions in one case, space limitations in another and customer demand for kosher food in the third.

The company cut those franchise holders, who are not of Arab descent, a break, even allowing one to renew his lease after the decision was made to deny renewal of Elkhatib's franchise.

"There is significant evidence that the carrying of breakfast sandwiches generally, and the carrying of meat products specifically, was not a factor that was important to Dunkin' Donuts in the franchise decisions," the panel wrote in its July 10 opinion.

But the appellate decision could be a hollow victory for Elkhatib. His franchise in Berkeley was not renewed in 2005 and his Westchester agreement is set to expire in April.

Even though he is up against a deadline Elkhatib vowed to keep fighting. "There's no other way," he said.


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