On the same day Founders Brewing announced it had permanently closed its Detroit location, a former employee filed a lawsuit against the company claiming the taproom’s work environment was “so objectively racially hostile that she had no choice but to resign.”
Plaintiff Naeemah Dillard filed a lawsuit in U.S. District Court in the Eastern District of Michigan Southern Division on May 1. On her behalf, attorney Jack Schulz detailed months of discrimination, unfair treatment and retaliation against Dillard in the complaint.
Dillard resigned April 23 and filed racial discrimination and retaliation charges with the Equal Employment Opportunity Commision (EEOC) on April 24, in which she alleged Founders violated Title VII of the Civil Rights Act of 1964.
Her complaint is the second high-profile lawsuit against Founders in which a Black employee alleged they were discriminated against at the Detroit taproom because of their race. Mahou San Miguel-owned Founders settled with Tracy Evans in his 2019 racial discrimination lawsuit, and closed the taproom for several months so it could handle “some challenges.”
“Throughout Ms. Dillard’s time as a manager at Founders’ Detroit Tap Room, she [was] utilized merely for the optics of having a Black manager while being treated completely different than her white counterparts,” Schulz wrote in a statement, which is included in full at the end of this story.
Dillard, a Black woman, was promoted to part-time taproom manager in July 2022 after joining the taproom staff as a taproom server in June 2021. She was one of several managers, the rest of whom were white, and “was treated much differently than her Caucasian counterparts” “from the start,” according to the complaint.
Dillard was the only taproom manager without a dedicated focus area – extra responsibilities assigned to each manager, such as handling training, scheduling and the taproom’s barrel room and mug club – and the only one who still worked service shifts. During her shifts as a server, Dillard was paid a lower hourly rate than her rate as a manager.
When focus areas became available or additional managerial tasks arose, Dillard was denied assignments.
“Rather than provide her with the unfilled focus of taproom training, Founders allowed a white server, Olivia Card, to clock in at a higher hourly rate to do this focus,” former taproom manager Justin Parent wrote in an affidavit that was filed with the complaint. “Similarly, when other employees with focus areas resigned, white employees were either promoted or had the duties shifted to them rather than give Naeemah any additional hours or responsibilities.”
When the scheduling focus area became available, Dillard was denied because she still worked serving shifts, which would “ironically” be a “conflict of interest,” according to the complaint. After taproom manager Gail Mason was promoted to general manager, her prior focus area of beer supply and merchandise was assigned to “a recently hired Caucasian host/busboy,” whose performance Parent had “expressed issues with” prior to his promotion.
Parent, a white man, participated in Dillard’s interview process and remembered former general manager Emily Habib “commenting that it would be ‘great optics’ to hire someone of color,” he wrote.
“I was shocked by the comment as I was employed throughout Founders’ previous lawsuit involving racial discrimination,” he wrote, referring to the lawsuit Founders settled with former Detroit taproom employee Tracy Evans, a Black man, in 2019.
Parent resigned last month because he “did not want to be part of this discrimination.”
“I was one of two managers who returned after the Tracy Evans lawsuit. I did so because I was explicitly told by Founders’ leadership at the highest level that there would be changes in culture,” Parent wrote. “The truth is that it never happened and I feel taken advantage of.”
In addition to being refused career advancement, Dillard was also allegedly subjected to “ongoing racial harassment,” including kitchen manager Jason Belhart “habitually and intentionally” misspelling and mispronouncing her name and being told by another coworker to make sure her six-year-old daughter “didn’t steal any money” when Dillard brought her to the taproom while waiting for child care.
In January 2022, Dillard reported to Habib she had been sexually harassed by Claude (no last name shared), a coworker; another employee reported the same incident to Habib. Claude remained employed at the taproom until April 9, 2023, following a similar sexual harassment complaint from a whit employee. When other employees learned Dillard had complained about Claude’s behavior the previous year, a coworker told others Dillard “doesn’t struggle enough to be Black.”
In October 2022, Dillard complained to HR that Belhart’s repeated mispronunciation of her name was discriminatory, which was backed up by similar complaints from other taproom managers about the same issue. After Dillard’s complaint, her hours “were drastically reduced,” but a White taproom manager received a raise, allegedly “specifically for being ‘quiet’ about Belhart,” according to the lawsuit.
After noticing the reduction in her hours, Dillard spoke with taprooms director Rick Smith, who used “baseball analogies” to explain she was “benched” and now “serves as a relief manager,” but assured Dillard “she was not having performance issues.”
In her lawsuit, Dillard alleges two sets of charges of each racial discrimination, a hostile work environment and retaliation. One set of charges alleges that Founders violated 42 U.S.C., the federal code that guarantees equal rights under the law, and the other that the company violated Michigan’s Elliott-Larsen Civil Rights Act. The complaint will be amended with additional claims when and if Dillard is granted the right to sue under her complaint with the EEOC.
In addition to a declaration that Founders violated the above laws, Dillard is seeking “all lost wages and benefits, past and future, to which she is entitled,” “appropriate equitable relief,” “compensatory damages,” “punitive damages,” “reasonable attorney fees, costs and interest,” and other relief as deemed “just and proper” by the court.
Yesterday, the brewery announced it had permanently shuttered the Detroit taproom, which “has not been immune to the struggle to regain foot traffic after temporary COVID closure that have impacted restaurants and bars across the nation.” Founders added it was “working diligently to find new positions within the company for the [38] employees impacted by this closure.”
A press release issued to the media and social media posts announcing the closure made no mention of Dillard’s lawsuit, and Founders has since disabled comments on its Facebook and Instagram posts about the closure.
In a statement, Founders said it was “unaware” of Dillard’s complaint when it announced the taproom’s closing.
“We announced the closing to all of our Detroit staff on Monday morning, and did not learn about the lawsuit filed against Founders until that evening when a reporter contacted us,” the company said.
Since settling with Evans in 2019, the company has “instituted mandatory bias, discrimination and harassment training throughout our organization,” it said. “We have reexamined our policies and enacted new policies, along with implementing new procedures for the reporting of workplace concerns.”
Year-to-date through March 26, off-premise dollar sales of the Mahou USA family – which includes Founders, Avery and Mahou Imports – declined -10.2%, to $22.1 million, while volume, measured in case sales, declined -14.6%, compared to the same period last year, according to market research firm Circana.
In the same period, dollar sales of Founders All Day IPA declined -9.2%, to $12.4 million, while volume declined -14.1%, compared to 2022, according to Circana.
In 2022, Mahou USA ranked as the 13th largest overall domestic brewing company by volume, according to the Brewers Association (BA). In 2021, Founders’ output declined -9%, to 540,000 barrels of beer, according to BA data.
Founders’ statement in full:
“We are deeply saddened and concerned to learn of the recent accusations that have been brought against the Detroit taproom. We take these claims very seriously, and we are conducting a thorough internal investigation.
Since 2019, we have instituted mandatory bias, discrimination and harassment training throughout our organization. We have reexamined our policies and enacted new policies, along with implementing new procedures for the reporting of workplace concerns.
Closing a business is a difficult decision, and this decision was made after a several year evaluation of the Detroit Taproom’s financial performance that began prior to COVID and was made worse by the pandemic. During the closure of our Detroit facility on Monday, we were unaware of the filing. We announced the closing to all of our Detroit staff on Monday morning, and did not learn about the lawsuit filed against Founders until that evening when a reporter contacted us. As with any closure, there was a lot of work that needed to be done to prepare for the loss of this extension, including redistribution of internal assets, conversations with our landlord and pulling together a comprehensive severance plan, all of which take time.
As to the pending lawsuit, we are sorry that this individual did not have a good experience with us, and to the extent it was due to our actions or inactions that contributed to that, we are deeply sorry.”
Schulz’ statement in full:
“Throughout Ms. Dillard’s time as a manager at Founders’ Detroit taproom, she [was] utilized merely for the optics of having a Black manager while being treated completely different than her white counterparts. Rather than provide Ms. Dillard with any actual management responsibilities, Founders’ leadership allowed white servers and bussers to essentially log in at a higher pay rate to perform the duties which unfairly were denied to Ms. Dillard. On top of this, Ms. Dillard was subjected to ongoing racial harassment which ranged from a manager intentionally mispronouncing her name, to being told she ‘has not struggled enough to be black’, to the general manager warning Ms. Dillard to watch her six year old child to be sure she didn’t ‘steal money’ while in the establishment. This list is not exhaustive.
“By any objective standard, Ms. Dillard’s treatment was appalling. When she reported the racism to management her hours were slashed in half or the complaints were completely dismissed. Ultimately, Ms. Dillard had no choice but to resign from such a hopeless situation. Last week, she spoke openly about the discrimination she was subjected to in her exit interview. It appears that Founders would rather end its relationship with Detroit than solve its deeply rooted issues. We are thankful to Ms. Dillard’s former coworkers who have come forward in support of her. My immediate thoughts are with the 38 employees who were terminated on May Day without any notice to prepare for the difficulties of unemployment.”
Editor’s note: this story was updated at 3:20 p.m. ET on May 2 to include a statement from Founders.
Editor’s note: this story was updated at 2:20 p.m. ET on October 20 to clarify accusations in the lawsuit.