Chick-fil-A Opens the Door to PR Crisis and Discrimination Liability

Sue Reisinger

Corporate Counsel

2012-08-06 00:00:00.0

Chick-fil-A Inc., previously best known for a deliberately misspelled ad campaign (Eat Mor Chikin) and a second-tier college football bowl game (Chick-fil-A Bowl), has now become a national symbol for corporate PR crises.

It all started when the Atlanta-based company's chief operating officer, Dan Cathy, told Christian news organization The Biblical Recorder last month that Chick-fil-A—which has donated millions of dollars to groups fighting same-sex marriage rights—supports the "traditional family" and "the biblical definition of the family unit."

In a later interview, Cathy went on to say, "I think we are inviting God's judgment on our nation when we shake our fist at him and say, 'We know better than you as to what constitutes a marriage.' " 

"Stupid, just stupid," said employment discrimination lawyer Peter LaSorsa, who has a private practice in Chicago. "From a legal perspective, I can't see anything but harm coming to a company that makes a statement like this."

In Illinois, LaSorsa said, such a statement could open the door to three different types of discrimination claims against the company: religious, sexual orientation, and marital status. In Illinois an employer can't ask about, or discriminate against, your marital status, explained LaSorsa, who stressed that he was speaking about corporations in general.

Cathy's statement also shook up the political chicken coop. Politicians in Boston and Chicago suggested the company not seek to open or expand there, while the Jim Henson Company said not only would it make no more Muppet toys for the company, but it would also donate the money it had received from Chick-fil-A to organizations supporting same-sex marriage in the U.S.

Other groups across the country organized a "gay kiss-in" over the weekend in Chick-fil-A restaurants. 

As some gay-friendly groups called for a boycott of the fast-food chain, Cathy supporters like Mike Huckabee, the former governor of Arkansas, as well as former Republican presidential candidate Rick Santorum urged friends and hundreds of thousands of Twitter followers to eat at the restaurants nationwide.

Kelly Ludwick, Chick-fil-A's senior director of corporate legal affairs, didn't return calls for comment. But after Cathy's statement garnered national media attention, the company released a statement trying to calm the situation and referring to its "biblically-based principles."

It said: "The Chick-fil-A culture and service tradition in our restaurants is to treat every person with honor, dignity, and respect—regardless of their belief, race, creed, sexual orientation, or gender. Going forward, our intent is to leave the policy debate over same-sex marriage to the government and political arena." (Continue reading >>)

Chick-fil-A was founded more than 60 years ago as a single eatery by its CEO, S. Truett Cathy, who runs the company today with his two sons, Dan, the president and COO; and Donald "Bubba" Cathy, the senior vice president.

Truett saw his company reach $4.1 billion in sales in 2011. It operates through independent contractors who buy licenses to run a franchise and "rent" the brand name through a percentage of their profits. 

True to his beliefs, Truett Cathy doesn't allow the stores to stay open on Sundays so that employees can keep the faith and be with their families. He also doesn't allow the Chick-fil-A Bowl (previously known as the Peach Bowl) in Atlanta to play college football games on Sundays. 

Although the bowl usually features teams from the Atlantic Coast Conference and Southeastern Conference that have been passed over by more prestigious bowls, the company recently announced that it will pursue a bid to host the national championship playoff games. The last thing such a venture needs is a high-profile social or legal controversy.

"The situation is unfortunate for the growth and development of the company, but it has dealt successfully with controversy before, whether over a sign or something else, and it will again," said Bureon Ledbetter Jr., the company's retired general counsel. 

Ledbetter started his legal career with Chick-fil-A in 1979 and spent nearly 30 years there. He now has his own consulting firm, Bel Group LLC, in South Carolina. 

Asked about Cathy's statement, Ledbetter said he hasn't been involved with the controversy. "But the city of Atlanta has had on its books for sometime an antidiscrimination ordinance that includes sexual orientation. I'm not aware of any situation among the franchises anywhere of a discrimination complaint based on sexual orientation," he said. 

Many brand company owners have strong religious views and manage for those principles to co-exist in business, he said. And he referred to a business philosophy he first expressed in a 2006 profile in the Daily Report (a Corporate Counsel sibling publication in Atlanta). 

"The family is religious, and we operate by biblical principles," Ledbetter said at the time. "We treat people with honor, dignity, and respect. But you don't have to be Christian to work here. We can't discriminate by law, and we don't."