Shareholder lawsuit against Wendy’s heating up!…

Fair Food activists walk out of last month’s Wendy’s shareholder meeting in Dublin, OH.

Attorney for shareholder: “This is so irrational, so extreme.  They should not be allowed to profit from slavery.”

In a potentially significant new development, a lawsuit filed by a Wendy’s shareholder in October had a hearing in federal court late last month on Wendy’s motion to dismiss, and the arguments went to the very heart of the growing boycott against the fast-food giant.

An article from May 30 in Law360 reported on the proceedings, explaining that the lawsuit was filed last fall because, according to the complaint:

As a direct result of Wendy’s failure to join the FFP, the company’s goodwill and reputation have declined, causing the company to become the subject of boycotts and protests across the country.

At the hearing, Wendy’s attorneys argued that the suit should be dismissed unless the shareholder can demonstrate that each of the ten board members named in the complaint was directly involved in the company’s decision to refuse to join the Fair Food Program.  The attorney for the shareholder, Gustavo Bruckner of Pomerantz LLP, refuted that argument as follows, according to the Law360 article:

He said the board’s actions were egregious in supporting and patronizing companies that forced their workers to toil under “slave conditions.”

“This is so irrational, so extreme,” Bruckner said. “They should not be allowed to profit from slavery. In no way should it be protected by the business judgment rule.”…

The judge’s decision on the motion to dismiss remains pending, but Bruckner told the reporter from Law360 that he was confident that the suit should survive the motion:

“I think Judge Engelmayer understands the issues,” Bruckner told Law360. “We don’t take these issues lightly. The behavior is egregious.”

We will be following this suit closely and will post any further developments as they occur.  You can read the article on the hearing in its entirety here.

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