After Racial Discrimination Settlement, Founders Brewing Faces Backlash

Dec 9, 2019

A version of this story originally aired on Marketplace Morning Report.

 

Spartan Spirits is a liquor store in downtown East Lansing. The store has a selection of some of the most popular beers in Michigan. But one brewery you won’t find on the shelves here is Founders Brewing Company, which also happens to be one of the largest breweries in the state.

Spartan Spirits and other businesses around Michigan are distancing themselves from Founders after the brewery settled a racial discrimination lawsuit with former employee Tracy Evans for an undisclosed amount. Evans declined to comment for the story.

 

In the lawsuit, Evans, who is black, alleged that during his more than four years working for Founders in both Grand Rapids and Detroit he was subjected to a racist work environment. Some of these allegations included employees’ use of the “N-word” as well as the description of two printers at Founders’ Grand Rapids location. Evans said the upstairs printer at the facility was referred to as the “white guy” printer while the downstairs one was called the “black guy” printer.

 

The Brewing Of A Boycott

 

The suit was filed in August 2018 but Founders wasn't the subject of heavy backlash until October of this year following a leaked deposition in which Founders Detroit general manager Dominic Ryan claimed he didn’t know Evans was black. 

 

Spartan Spirits owner Michael Mansour says as soon as he read about the situation between Founders and Evans, he took action.

 

“I took notice of the article and then I went home and as I was explaining it to my wife I said to her - you know what, I think I should remove this from my shelves immediately.” Mansour said.

 

Rich McCarius owns Tom’s Party Store and Wine Shop in East Lansing. He said he’s also heard feedback from his customers.

 

“There are people who are very upset with Founders, who are boycotting Founders and have declared that they are not going to buy Founders," said McCarius. "They have moved on to other brands."

There are people who are very upset with Founders, who are boycotting Founders and have declared that they are not going to buy Founders. They have moved on to other brands.

 

McCarius said even die hard Founders fans have moved on.

“Well, we have one lady, she's very loyal to Founders buying their All Day Session IPA,” he said. "But she declared she was done and she has moved on to Griffin Claw, which is another Michigan product. And so, it's Griffin Claw’s gain and Founders’ loss and thankfully, she still buys her beer here.”

 

Shortly after Founders drew the ire of distributors and customers, Founders’ diversity and inclusion director Graci Harkema resigned, claiming the company was more interested in winning the lawsuit than listening to her feedback on how to build its reputation.

 

Repairing A Reputation

 

Former state senator Buzz Thomas has been tasked with filling Harkema’s role. As the interim director of diversity, equity and inclusion for Founders, Thomas said he is working to implement processes that didn’t happen in the past.

 

“We're going to be essentially interviewing and surveying every employee of Founders to really get a sense of where inclusion fits into the organization.” Thomas said.

 

Since the settlement, Founders has closed its Detroit taproom. The company plans to reopen it in 2020. When it does, Founders says it’ll donate all of the proceeds from the taproom to charitable causes through at least 2022.

Thomas said part of that plan includes continuing to pay the employees of the Detroit taproom.

 

“They're just as much a victim here in this situation, and it's through no fault of their own," he says. "So the ownership really felt that it was important to make sure that they're made whole throughout this process.”

 

Michigan State University economist Charley Ballard said in the long term, the boycotts against Founders are unlikely to have much impact. Ballard highlights the steps Founders is taking at the Detroit taproom.

 

 

And I have a feeling that eventually this campaign will sort of lose some steam and one by one people will say 'Well, Founders has done enough.'

“The decision to donate those proceeds over a long period of time strikes me as a pretty strong statement on the part of Founders," said Ballard. "And I have a feeling that eventually this campaign will sort of lose some steam and one by one people will say ‘well, Founders has done enough.’”

 

Dominic Ryan, the Detroit taproom GM from the now infamous deposition is on a leave of absence from the company. Thomas said he suspects Ryan won't have a future with the company.

 

"I can say that he clearly made some colossally bad decisions that impacted the morale, and the enterprise here in Detroit. And we are not going to make those mistakes ever again." Thomas said.

 

In August, Spanish brewer Mahou San Miguel acquired a 90% stake in Founders. Earlier this year, Founders also began to distribute its beer in all 50 states. A Founders spokesperson said the company doesn't publicly release sales figures, but it anticipates ending the year with 570,000 barrels shipped, an increase over last year.