The company's past troubles inspired change throughout the organization.
In the mid-1990s, Denny’s faced class-action lawsuits that accused the company of discriminatory actions. The family-dining leader agreed to pay more than $54 million to settle lawsuits filed by thousands of black customers who claimed they were refused service or forced to wait longer or pay more than white guests.
At the time, Deval L. Patrick, head of the civil rights division of the Justice Department, called it the largest and broadest settlement under the Federal public-accommodation laws. In all, more than 4,300 claims were filed.
The story catapulted Denny’s to the forefront of a growing conversation over racial issues in the workplace. In 1995, it formed a diversity team and implemented new training practices. It also made a concerted effort to recruit minority employees and empower voices up and down the corporate ladder.
By 2000, Denny’s earned the top ranking in Fortune’s “America’s 50 Best Companies for Minorities.” It fronted the list the following year, too.
Today, diversity remains a top-flight issue across the country for companies of all sizes—heightened to hyper levels by headline events, like the deaths of George Floyd and Breonna Taylor, and the Black Lives Matter movement. While diversity and inclusion initiatives represent relatively recent practices for some companies, Denny’s has been at it for decades.
Rather than just put the 1990s incident behind it, the company shifted focus entirely.
About two-thirds of Denny’s present workforce is made up of minority groups, including half of restaurant management level employees. The company’s board consists of 44 percent minorities and 33 percent women. Additionally, Denny’s has spent more than $2 billion with diverse and disadvantaged suppliers since it introduced a Supplier Diversity Program in 1993. Last year, diverse and disadvantaged businesses represented 14.1 percent of Denny’s total purchases. Michelle Hunt, a 25-year Denny’s vet, serves as Denny’s director of supplier diversity.
April Kelly-Drummond, head of diversity, equality, inclusion, and multicultural engagement, who has also been with Denny’s for more than 25 years, and Fasika Melaku, VP of learning and development, chatted with FSR about Denny’s efforts on the inclusion topic, why they’re critical today, and how the company can continue to make progress.
After the class action lawsuit of the 90s, what steps did Denny’s take to improve diversity, equity and inclusion efforts?
The lawsuit was a shameful part of our history. However, we have used it as a learning experience, holding ourselves accountable and making changes that show our commitment to diversity, equity and inclusion. We’ve worked tirelessly for 25 years to become a model company in this area, and to create a space where all customers are treated with respect, dignity and fairness We are honored to have worked alongside the late Coretta Scott King and Julian Bond, the late Board Chair of the NAACP, among other civil rights leaders to reshape our business practices and corporate culture. We’ve made tremendous strides in building a diverse workforce, from our restaurants to our Board of Directors. At every level of the organization, we’ve embraced DEI as a core business strategy, which is reflected in every facet of the business from our supplier diversity program, to unconscious bias trainings to a focus on inclusive marketing. We’ve been doing the work for a long time, and we’re encouraged by the results, but we’re not going to take our foot of the gas. We are continuing to build and further develop programs that celebrate and encourage DEI.
As a leader in Diversity & Inclusion today, what new initiatives has Denny's rolled out to continue to improve diversity and inclusion in the workplace and foster a welcoming environment?
Along with a zero-discrimination policy and unconscious bias trainings, Denny’s established programs like Hungry for Education, awarding $1.5 million dollars in scholarship money to Black, Hispanic and Asian students in the U.S. and Puerto Rico to help make their dream of attending college a reality. This program includes long-standing partnerships with The Tom Joyner Foundation, the Hispanic Association of Colleges & Universities and U.S Pan Asian American Chamber of Commerce.
Denny’s has also developed strategic partnerships with organizations including the League of United Latin American Citizens, Multicultural Foodservice & Hospitality Alliance, National Action Network, Rainbow PUSH Coalition and Urban League of Upstate.
We have also developed a robust Supplier Diversity Program. Since 1993, Denny’s has spent more than $2 billion on supplier diversity and for the last ten years, at least 10% of Denny’s supplier contracts, in dollar terms, have gone to diverse and disadvantaged businesses. In 2019, diverse and disadvantaged businesses represented 14.1% of Denny's purchases, including Tier 1 and 2 spending. We continue our search to identify diverse and disadvantaged suppliers through community outreach and our committed organizational partners, including the National Minority Supplier Development Council, Women’s Business Enterprise National Council, National Veteran Business Development Council and National LGBT Chamber of Commerce.
How has Denny's communicated with employees regarding Black Lives Matter and police brutality, including the shooting of Jacob Blake? Is there a way for team members to express their concerns and to get that dialogue going?
At Denny’s, we believe in leading by example and being vocal in times of unrest. We are extremely lucky to have executives who use their platforms to address problems like racial injustice. Earlier this year, our CEO John Miller shared an open letter, addressing racism, bias and discrimination in the United States. The letter also addresses Denny’s firm stance against all forms of racism, discrimination and intolerance—and communicates our pledge to fight for a more just future.
Along with an internal video addressing Black Lives Matter and racism from John Miller, our Chair of the Board Brenda Lauderback, and myself, Denny’s launched a series of fireside chats where employees at all levels can have open conversations about race and diversity with senior leaders. In an effort to guide each program, we send out anonymous surveys to get a pulse on what our workforce feels are the day’s most pressing issues. These help us to gather insight from our employees on these tough conversations and how they would best like to address them in the workplace.
How do you create a work environment where people feel safe discussing issues pertaining to diversity, equality, and inclusion?
As America’s Diner, we have committed ourselves to creating a safe and open working environment for all employees. We have devoted our time and resources to ensuring that employees feel comfortable discussing issues related to race and diversity.
To create such an environment, Denny’s recently launched two initiatives—our DEI Council and Business Resource Groups. Both help foster a more inclusive work environment, improve communication and trust among employees, and educate employees on all matters related to diversity, equality and inclusion. We believe initiatives, like these Business Resource Groups, are instrumental to the success of the business, boosting recruiting and retention and both personal and professional development.
At Denny’s, we also believe in leading by example. John Miller is a proud member of the CEO Action for Diversity & Inclusion coalition, the largest CEO-driven business commitment to advance diversity and inclusion in the workplace. Our Chief Brand Officer, John Dillon, is a vocal member of the Alliance for Inclusive and Multicultural Marketing. Additionally, our DE&I Council consists of ten senior leaders each responsible for a pillar of our DE&I strategy.