Carmen has developed a reputation as a national leader in asserting civil rights claims on behalf of minority franchisees who contend that they did not receive equal treatment from the franchisor or its agents.
The federal civil rights law (42 U.S.C. Section 1981) prohibits racial discrimination in “the making, performance, modification, and termination of contracts” and in the “enjoyment of all benefits, privileges, terms, and conditions of the contractual relationship.” This statute plainly applies to franchise relationships and guarantees equal treatment for all persons of color as well as Muslim Americans who have been recognized by the federal courts as being protected under this law.
Among the civil rights matters Carmen has handled within the franchising arena are:
- As settlement on the eve of jury trial in a Section 1981 case on behalf of an African American franchisee who was denied the opportunity to purchase a franchise in white suburbs of Chicago because the franchisor had considered race in assigning different communities (by zip code) into segregated territories. An earlier opinion denying the franchisor’s motion for summary judgment (Home Repair, Inc. vs. Paul W. Davis Systems, Inc., 2000 U.S. Dist. LEXIS 929 (N.D. Ill. 2000), received attention and led Carmen to write an article for Franchise Times (Racial Discrimination in Franchising).
- At trial involving Section 1981 claim in federal court on behalf of an African American franchisee who claimed he was a victim of racial steering when he was told not to open a franchised restaurant in a black neighborhood of Chicago, rather he should open in a white suburb. The ruling in this trial has made it easier for plaintiffs to recover lost profits when denied the opportunity to open units in successful franchising systems. Carmen earned substantial praise from the presiding federal judge, but the jury returned verdict for defendant.
- Pending claims of discrimination on behalf of a Muslim American franchisee in a national restaurant chain contending that his units were subjected to discriminatory inspection standards as the franchisor sought to have white franchisees take over his units.
- Pending claims of discrimination on behalf of an African American franchisee contending that a franchisor discriminated against him in denying approval for a new unit based on proximity to an existing unit.
In 2016, Carmen D. Caruso was asked to serve as co-chair of the Civil Rights Litigation Committee of the American Bar Association (Section of Litigation).
The federal civil rights law does not provide comparable protection on the basis of gender, orientation or disability etc. However, protection may be found under the human rights ordinances of many municipalities, under the general anti-discrimination provisions of the Illinois Franchise Disclosure Act, and at common law in the doctrine of good faith and fair dealing.
Carmen and his team have also quickly and quietly resolved a small number of claims of franchising discrimination unrelated to race.