Chicago City Wire

Chicago-based fast food giant McDonald’s has reached a settlement in a lawsuit filed by the American Alliance for Equal Rights (AAER), challenging the company's HACER National Scholarship Program, which was exclusive to Latino students. 

The AAER filed a lawsuit against McDonald's on Jan. 12, alleging that the HACER scholarship program violated civil rights laws by restricting eligibility to students with Hispanic or Latino heritage.

The lawsuit alleged that the program, which has been awarding scholarships since 1985, unfairly discriminated against non-Latino applicants.

“McDonald’s and the American Alliance for Equal Rights agreed to a joint stipulation that dismisses AAER’s lawsuit (which was filed only two weeks ago!) challenging the Hispanic-only Haser scholarship program that McDonald’s established forty years ago,” Edward Blum, the founder of AAER, said in a press release. 

The lawsuit challenged the program’s race-based criteria, which required applicants to have at least one Latino parent and come from a family with ties to one of 22 Hispanic/Latino countries. 

Blum, a vocal critic of affirmative action and ethnicity-based programs, criticized McDonald’s for maintaining the program for so long.

“McDonald’s has wisely agreed to end this discriminatory scholarship program,” Blum said, according to the Associated Press. “It is a shame that over many years thousands of students were shut out of this program because they were not the preferred ethnicity.”

As part of the settlement, McDonald's agreed to continue the scholarship program but will now allow applicants from all ethnic backgrounds. 

“Going forward…the scholarship ‘will not have any eligibility requirement or preference based on applicants’ race or ethnicity,’ Blum said. 

McDonald's has agreed to continue to operate its HACER National Scholarship Program, but with expanded eligibility that reflects Blum’s broader push for race-neutral policies. 

The corporation also extended the application deadline for this year’s scholarships to March 6, allowing new applicants to apply under the revised eligibility criteria.

With the new deadline for applications, students who were previously excluded from the program due to their ethnicity now have the chance to apply, marking a significant shift in the company’s approach to educational support.

Blum, a leading figure in challenging race-based policies in the U.S., hailed the settlement as a major victory.

He expressed his satisfaction with how quickly the case was resolved, especially in comparison to other lawsuits the organization has filed.

“Since AAER’s founding in 2021, I can’t recall any of our nearly two dozen lawsuits that resulted in a legal victory as fast as this one,” Blum said. “This is a significant and swift legal success, and I owe a lot to our incredible lawyers at Consovoy McCarthy, PLLC, who helped make this happen.”

Founded in 2021, the AAER has quickly become a leading force in challenging race-based policies, particularly in education and hiring practices. 

Blum is also widely recognized for his role in the landmark Supreme Court case that struck down race-based admissions in college programs.

The settlement is part of a broader trend of companies reevaluating their diversity initiatives in the wake of the U.S. Supreme Court’s 2023 ruling banning the use of race as a factor in college admissions. 

This ruling has prompted many organizations, now including McDonald’s, to reassess how they approach diversity in scholarships, hiring, and other programs.