Shoney’s Officials Deny Reports Former Chairman Forced Out
NASHVILLE, Tenn. (AP) _ Shoney’s Inc. officials denied reports Monday that Leonard H. Roberts was forced to resign as chairman because of his push for affirmative action.
But an industry analyst said Roberts’ efforts to change the Shoney’s ″culture″ probably alienated his fellow officers so they wanted to get rid of him.
Roberts’ resignation Thursday came six weeks after the Nashville-based restaurant chain settled a racial discrimination lawsuit for $105 million.
The Wall Street Journal reported Monday that Roberts was forced out because he had pushed too hard in trying to reform corporate policies that encouraged racism.
The newspaper also said that three of four executives brought in by Roberts to help his affirmative action efforts were fired Friday.
″The inference that anyone at Shoney’s was ousted or resigned because of a stance on affirmative action or the discrimination lawsuit is untrue,″ Taylor H. Henry Jr., who replaced Roberts as chairman and chief executive officer, said in a statement.
As for the othr executives, Shoney’s spokesman Tom Lawrence said ″They were brought in as part of the company’s franchise development program and had no responsibility with affirmative action or minority affairs as was reported.″
The lawsuit filed 3 1/2 years ago in Florida by nine black employees charged that Shoney’s operated under a code ordered by major stockholder and former chairman Ray Danner that limited the number of black employees per restaurant and restricted those hired to kitchen work.
Racist practices were commonplace, according to sworn affidavits cited in the Journal article.
For instance, former Shoney’s manager Jerry Garner said in a deposition that Danner, using a common epithet referring to blacks, told him in 1981 that he had too blacks many working in a Nashville restaurant and that Garner should fire them or he would be fired himself, the Journal reported.
The Journal reported that Roberts had grown tired of battling Shoney’s top executives over race relations.
Roberts told one friend that ″I can fight all sorts of business-related problems, but life is too short to spend so much time trying to buck a system of racism,″ the newspaper said.
Industry analyst Barry Stouffer, who works for J.C. Bradford & Co. in Nashville, said Roberts’ push for affirmative action probably was a significant factor in his resignation.
″I think it’s safe to safe to assume by the fact that they put Taylor Henry in at CEO - and he’s a longtime Shoney’s executive - that they wanted somebody that more embodies the Shoney’s culture,″ Stouffer said.
″Roberts was trying to change that culture, and the board and some of the other management people resisted that change and thought it was the wrong direction to go.″
On Wall Street, Shoney’s stock lost $1.50 on the New York Stock Exchange Monday, closing at $21.62 1/2
Shoney’s operates and franchises 1,803 Shoney’s, Captain D’s, Lee’s, Pargo’s and Fifth Quarter restaurants in 36 states and Canada.
In settling the discrimination suit Nov. 3, Shoney’s admitted no wrongdong, but agreed to pay $105 million - minus legal costs and taxes - into a fund from which employees subjected to discrimination could be paid.
The settlement resulted in a charge of $77 million against Shoney’s fourth quarter earnings. The company reported losing $64.8 million for the quarter, or $1.56 per share.