Founders Brewing Company has temporarily shuttered its Detroit taproom amid growing backlash against the Grand Rapids, Michigan-based craft brewery following the leak of a deposition in an ongoing racial discrimination lawsuit against the company.
Citing employee safety concerns, Founders announced the taproom’s closure on Friday, October 25.
That same day, Founders diversity and inclusion director, Graci Harkema, announced her resignation from the company due to the leadership team repeatedly ignoring her advice and the company’s actions not aligning with her values.
Speaking to Brewbound, Founders co-founder and president Dave Engbers said the taproom’s closure “was a reaction to some very tense times down there.”
“We’re fully conscious that this is a highly emotional situation, and our employees’ well-being was the No. 1 thing we wanted to take care of,” he said.
Engbers and co-founder Mike Stevens issued an apology letter on Friday to the company’s 600 staff members “for all of the negative attention,” and they vowed to work with their employees to “ensure a positive future.”
“Whatever falls short – according to our culture bringing people together and standards – will be fixed,” they wrote. “Our Founders Family will point us in the right direction.”
Friday’s moves were the latest fallout from a racial discrimination lawsuit filed in August 2018 by former Founders employee Tracy Evans against the company alleging that the craft brewery tolerated a “racist internal corporate culture.”
According to Evans, who is black, multiple employees used racial slurs around him, and he filed an official complaint with the company’s human resources department in the fall of 2017, according to documents filed with the U.S. District Court Eastern District of Michigan Southern Division. Evans expressed his frustrations to management that the employees involved continued to make racist comments and had planned to use a personal day on June 1, 2018 to travel to Grand Rapids to make a second formal complaint to human resources. He postponed that day in order to meet with his manager to discuss a project. Evans was informed of his termination on June 5, 2018.
The lawsuit garnered national attention last week after the Detroit Metro Times published a transcript of a previously unreleased deposition in which Dominic Ryan, the general manager of Founders’ Detroit taproom, declined to acknowledge whether Evans and several prominent African Americans, including President Barack Obama and Michael Jordan, are black. The company has since removed Ryan from his duties in Detroit and placed him on a paid leave of absence “until we can figure out what’s the best thing for him,” Engbers said.
As news of the deposition spread, some retailers pulled Founders’ products from shelves, and the company backed out of a fall beer festival in Detroit. Additionally, some Founders Detroit taproom employees held a “peaceful gathering” on Saturday to show solidarity with the local community.
Meanwhile, Founders’ diversity and inclusion director Graci Harkema, who the company hired in January 2019, announced her resignation in social media posts.
“We as a company didn’t have to be at the place we’re at now,” Harkema wrote in her resignation letter, which was also shared on social media. “If the voice of a diversity & inclusion director was heard, headlines would read much differently. We had the opportunity to be the hero in how we addressed the situation, instead we have lost the trust of the community, many of our accounts, and many of our own employees.”
In her letter, Harkema called out the company’s leadership team for prioritizing winning the lawsuit above all else.
“You are most concerned with the ego of ‘winning’ than you are about the loss of customers, loss of reputation and loss of employees’ wellbeing.” she wrote.
“Your actions have explicitly shown you are more interested in the optics of my face, than the impact of my voice,” she added. “I have dedicated myself to a life and career of equity, ethics, integrity, and morals. I cannot represent a company who doesn’t stand for the same.”
Harkema has not responded to requests for comment.
Engbers credited Harkema with helping Founders create educational programs for its staff on diversity and inclusion, unconscious bias and the LGBTQ community. He added that Founders “absolutely” plans to hire another diversity and inclusion director after Harkema’s departure; her last day with the company is November 8, according to her resignation letter.
“Quite honestly, prior to the lawsuit, this was one of those things that I kind of chalk up to our purposeful progress,” Engbers told Brewbound. “We thought we were doing a really, really good job. We referred to ourselves as the island of misfit toys. We have always had a pretty diverse and interesting group of folks that work at Founders, and it just kind of seemed to work. We were always kind of afraid to try to define it, because we were afraid if we tried to define it, it might ruin it.”
For his part, Evans appeared on NPR station WDET’s CultureShift on Friday, and detailed his Founders career, advancing from the packaging department in Grand Rapids to taking on events and promotions at the Detroit taproom.
“Coming into Detroit, I thought there was a chance and an opportunity for not only Founders Brewing Company but myself to make an impact and change those things,” he said. “It was very evident after some time that that wasn’t the case and that these sorts of things would not be able to be fixed.”
Founders has admitted that a slur was used, and the employee was reprimanded. However, the company insists that Evans’ employment was terminated due to poor performance.
Asked how Evans could thrive in an environment that he believed was hostile, Engbers told Brewbound that he thought Evans was satisfied with human resources’s handling of the complaint.
“As soon as we found out about it, it was dealt with, but we do not condone it at all,” Engbers said. “The only reason Tracy was let go was due to his performance.”
Evans’ employment was terminated in June 2018, and he filed the lawsuit two months later. Evans told WDET that his mother encouraged him to speak up about his experience at Founders.
“Look, when you get in these situations it takes time,” he said. “It takes time for you to process them and understand that these things happen and how they happen to you.”
Evans’ attorney, Jack Schulz, said he hopes Evans’ lawsuit can bring about “industry-wide change for racial equality.”
Founders’ Detroit taproom remained closed on October 29. During the temporary closure, Founders will continue to pay its Detroit taproom employees.
Engbers said the company plans to meet with its employees and retailers in the coming days.
“We’ve had a lot of support from other brewer friends, beer enthusiasts, but our employees there are a lot of people who work for the company who are now kind of questioning ‘What kind of company do I really work for?’” he said. “This lawsuit wasn’t meant to be put out in social media, and so it’s hurt a lot of people on both sides. There are no winners here, but I will say this: I do think that, in time, we will get through this, and I hope that we continue to mend some fences along the way, and open up more dialogue so other breweries don’t have to go through this.”
In August, Founders announced that Spanish brewer Mahou San Miguel would acquire a 90% stake in the business. Engbers told Brewbound that the deal is still expected to close in January and Mahou San Miguel is aware of the situation.