The Biggest Restaurant Scandals Ever

Running a restaurant is no easy task at the best of times, as it's difficult to make your customers and critics happy while somehow keeping your bottom line under control and staying one step ahead of the rapacious competition. Things get even worse when you bring in criminal activity, disease outbreaks, and racial discrimination, all of which can garner a restaurant exactly the wrong kind of exposure. Remember, you want your eatery to be famous or fashionable, not notorious. 

Unfortunately, these famous restaurants did just that, bringing attention to themselves on a national scale for some of the worst reasons ever. They say all publicity is good publicity, but in these cases, that statement couldn't be farther from the truth. We're pretty sure you'll remember some of these scandals (as they made quite a splash), but just in case, here's a roundup of some of the worst scandals to ever rock the restaurant industry. Some of these eateries have turned things around... and others are still suffering from the negative attention.

In 1994, a class-action lawsuit was brought against national restaurant chain Denny's for violation of federal public-accommodation laws against racial discrimination. Thousands of Black customers complained about being segregated or forced to wait longer than white patrons, as well as being arbitrarily refused service or forced to prepay. In one instance, a Black federal judge was forced to wait an hour for his food while being taunted with racial epithets by white teenagers. Another time, six Black Secret Service agents assigned to President Clinton's security detail were refused service while their white colleagues were seated and served.

The class action suit combined over 4,300 claims that the restaurant treated Black patrons worse than white patrons and caused the company to fear for its bottom line due to the fact that a good 10% of its customers were Black. While the company denied any specific policy of racial discrimination, it agreed to pay a settlement of $54 million and promised to take immediate steps to fix the problem. Denny's came to a deal with the NAACP to invest $1 billion in jobs and contracts for minorities over the following seven years and made great progress in increasing its number of minority employees. In 2001, Denny's parent company, Advantica, was named Best Company in America for Minorities by Fortune magazine, and they followed up in 2002 with a third place win.

Still, old habits die hard. In 2016, Denny's paid an undisclosed settlement to a Black couple who sued the restaurant for forcing them to prepay while visiting a location in Koreatown in August 2014. The restaurant argued the reason for the request was due to the large size of the order and a history of customers leaving without paying, but the decision was in violation of both state law and Denny's own policies.

In March 2005, a customer named Anna Aayala was highly disturbed when she allegedly bit into a partial human finger in the bowl of chili she ordered from a San Jose Wendy's restaurant. The piece of finger was 1-½ inches long with a long manicured nail, and as all employees were found to have their digits attached, Wendy's officials were forced to desperately speculate it may have come from somewhere further up the food chain. Wendy's offered $50,000 for information related to the finger, an understandable public relations concern considering how much their mascot looks like she hungers for human flesh.

Police were suspicious when forensics tests indicated Ms. Aayala never actually bit into the finger. Police also noticed she had a history of lawsuits against other companies. It turned out Aayala's husband, Jaime Plascencia, paid $100 to a co-worker for the digit, which had been severed in an industrial accident. The co-worker came forward to police, and Aayala and Plascencia were ultimately found guilty of conspiracy to file a false insurance claim and attempted grand theft with damages exceeding $2.5 million.

Plascencia was sentenced to 12 years behind bars and Aayala to nine years, but was released after four years for good behavior on the stipulation she never enter a Wendy's restaurant again for the rest of her life. Wendy's claimed it lost $2.5 million in sales over the incident, and the pair were ordered to pay $21.8 million to Wendy's International and its owner, JEM Management for damages, but the company agreed not to collect as long as the couple didn't try to profit from the story in the future.

In 2014, a man named Liu Joyou was pulled over by police for a routine traffic stop in China's northern Shaanxi province and tested positive for opium, which Liu maintained he had never consumed in his life. Liu blamed a local noodle shop, but the police didn't believe him until Liu's family ate at the same restaurant and tested positive for opium themselves, proof of which they shared with police. The noodle shop owner was detained and confessed to purchasing 2 kilograms of poppy shells to add to his food in order to lure customers to come back to his shop, thanks to their mild addictive qualities. Liu was released, but his appeal against his 15-day detention was dismissed by police.

Opium poppies and shells are illegal to use in cooking in China due to their mild narcotic addictive effect, but remain popular among restaurant owners. In 2016, the China Food and Drug Administration accused 35 restaurants across the country of using ground poppy powder as a seasoning in dishes like soup, grilled fish, hot pot, or fried chicken. The poppy capsules are made from the dried pericarp of the ripe fruit of an opium poppy plant and contain alkaloids common with morphine and codeine, and remain legal for use in Chinese traditional medicine. The capsule is mixed with MSG to make detection more difficult, and carries a sentence of 15 days in detention or a fine of up to 3,000 renminbi ($435). Whether or not the opium actually gets people addicted to a restaurant's food is unknown.

After being caught up in the notorious horsemeat scandal of 2013, British restaurant chain Whitbread promised to institute a new system to track meat from "field to fork." This proved to be all hot air. It was later discovered the company was failing to mention the beef lasagna advertised on its menus was actually made from a beef and pork ragu. The whistleblower who brought the scandal to light told The Sun newspaper (via The Guardian), "I spotted the packs marked 'beef lasagne' started coming in as 'meat lasagne.' I looked at the ingredients and noticed it actually contains pork and beef. I queried it with management but they didn't care. Three months on and the menus still say beef lasagne, and waiters have not been told to warn customers."

Up to 250,000 of the dishes were served, with the dish containing pork as a third of the entire meat content of the lasagna. Whitbread claimed there had been no deliberate intent to deceive customers, saying it simply forgot to update its menus. Muslim and Jewish diners were understandably outraged, although luckily Muslim halal traditions state it is acceptable to eat pork inadvertently, while lasagna wouldn't be kosher anyway.

Speaking of kosher, Israel would be the one country where you wouldn't expect this sort of thing to happen. But a class-action lawsuit was brought against upscale Tel Aviv restaurant Zepra over allegedly mislabeling pork dishes as beef since at least 2013. A customer hired a private detective to perform DNA analysis on dishes advertised as beef, but a bull was not the father. A boar was. So while the restaurant doesn't have kosher certification and does have some pork on the menu openly, the blatant deception made it liable for defrauding customers.

In 2016, a former restaurant owner in Minnesota was charged with running an extensive drug trafficking ring through three El Parian Mexican restaurants in suburbs of the Twin Cities. An indictment was filed against Aldo Escoto for using the restaurants as a front to launder money, harbor and employ undocumented immigrants, and distribute marijuana, cocaine, and methamphetamine. It is believed the restaurants were among many assets purchased by Mr. Escoto with the proceeds of drug sales, including cars and real estate. He is even believed to have operated an extensive marijuana growing operation employing undocumented immigrants.

Federal authorities became aware of Mr. Escoto's operation in 2012 following a tip from a confidential informant. Mr. Escoto as well as an El Parian manager and another co-conspirator were hit with 46 charges, but the restaurants had already been taken over by a relative and subsequently sold to new owners. According to a consultant for the new El Parian owners, they have nothing to do with the drug conspiracy and merely wish to concentrate on making good Mexican food. Mr. Escoto remains at large.

Andrea Benitez Gonzalez is the daughter of Humberto Benitez Trevino, former attorney general of Mexico and head of the Federal Attorney's Office for the Consumer (Profeco) until his daughter got him fired. In April 2013, Ms. Benitez arrived at the upscale Mexico City restaurant Maximo Bistrot and was enraged she had to wait for the table she wanted during the Friday lunch rush. She became further enraged when a table became vacant but the owner gave it to customers who had been waiting longer. According to owner Gabriela Lopez, "The young woman was annoyed, said it was her turn. I explained that we had to follow the order and that I could offer her a table inside. ... She started to threaten me and said her father was the attorney and that she was going to speak with him ... and get the business closed down." As Ms. Benitez left, she allegedly told Lopez, "You don't know who you're messing with" (via ABC News).

Sure enough, three hours later inspectors from Profeco arrived and attempted to shut the restaurant down. Benitez was shameless enough to rant about the restaurant on Twitter: "Awful service, lack of education... will never go back." This quickly led to a backlash by a Mexican public tired of egregious misbehavior by the elite; she was dubbed "Lady Profeco" and subject to thousands of mocking tweets.

Humberto Benitez apologized and said the incident was a regrettable overreaction, but the government was spooked enough that President Peña Nieto had Benitez unceremoniously sacked.

Don Diego Sutton Coldfield in Birmingham was a tapas bar restaurant selected for the 2014 Michelin Guide, the only Michelin-approved restaurant in the area. Despite that high honor, it didn't take long for things to get dire for Don Diego. In 2015, the owners of Don Diego sold it to concentrate on a new venture, and by the following year the new owners were mired in financial difficulties. The restaurant was closed permanently in February 2016 following an assault.

Owner Ahmet Dincer had come to the belief that two employees, cook Carlos Tirado and waitress Monica Lopez, were responsible for the failure of the once-lauded business. He lured them to the restaurant with promises of money he owed them and instead attacked Mr Tirado with a baseball bat and BB gun before trying to set fire to the restaurant, which he had primed with diesel. His plan was to knock them unconscious and leave them in the burning building, but he was foiled, and police later found petrol bombs in his car. During the trial it was revealed Mr. Dincer had lost £100,000 of his savings on the restaurant he had run for only eight to nine months, and his own wife confessed to stealing money from the business. Dincer was sentenced to 12 years for the attack and two counts of attempted arson.

In October 2003, health officials in Pennsylvania were alerted to an unusually widespread hepatitis A outbreak in Beaver Country near Pittsburgh and tracked the source to a local Chi-Chi's Mexican restaurant, which voluntarily closed its doors. Over 8,500 antibody inoculations were given out but ultimately over 650 people were confirmed to have been infected including 13 Chi-Chi's employees, with four deaths caused by the illness. Local residents were shocked, with one commenting, "It's pretty crazy because it just affects everyone. Everyone eats there. You just don't know who could be sick" (via The New York Times).

Hepatitis A infection usually occurs as the result of contact with fecal matter or contaminated food, with an incubation period of 15 to 50 days. The ultimate source of the infection was believed to be green onions sourced from Mexico, usually served raw at the restaurant. They had also been implicated in outbreaks in Tennessee, Georgia, and North Carolina in September of that year.

Although Chi-Chi's had filed for Chapter 11 bankruptcy just before the outbreak, the court allowed victims to settle their claims against the company first. Settlements were made with 78 hepatitis A outbreak victims, including $6.25 million for a man whose suffered liver failure and needed a transplant, while a class-action lawsuit by 4,991 people who received immunity shots led to a $880,000 settlement fund distributed between claimants. Most of Chi-Chi's properties, including furniture, fixtures, equipment, and liquor licenses were bought out by Outback Steakhouse, and the last Chi-Chi's meal in the United States was served in September 2004.

"Sambo" is a racial slur originating from the 1899 book "The Story of Little Black Sambo," which told the tale of a south Indian boy who became emblematic of the "pickaninny" stereotype. While unacceptable today, there was once a restaurant called Sambo's (with 1,117 locations in 47 states) that deliberately played up the connection. The restaurant first opened in 1957 and was named for a combination of the names of the two founders: Sam Battistone Sr. and Newell Bohnett. It was originally intended as a cheap coffee-and-pancakes place for the blue collar working class and did well throughout the 1960s thanks to clever marketing and a reluctance to raise prices. Most of the locations were decorated with murals depicting the life of Little Black Sambo, as the promotional value of the imagery was part of the chain's success.

Trouble started as new restaurants appeared in areas which had known the struggles of the civil rights movement and weren't particularly pleased with a pancake place named for a racial stereotype. By the late 1970s, the company was being hit with lawsuits and the NAACP became involved. Sambo's executives defended the "artistically creative murals" and innocent nature of the name, but the Rhode Island Human Rights Commission determined "the use of the name 'Sambo's' had the effect of notifying Black persons that they were unwelcome at Sambo's restaurants because of their race."

Eventually some locations renamed themselves (examples include No Place Like Sam and Jolly Tiger), but it was too late. Amid the racial controversy, the company was suffering from unrelated financial and legal woes: a managerial walkout, corruption charges related to a cattle-ranching scheme, health code violation fines, and a lawsuit from Dr Pepper over a jingle. By 1982, most of the restaurants were closed and the company filed for bankruptcy. Currently the only Sambo's still in operation is the original location in Santa Barbara, run by Chad Stevens, grandson of Sam Battistone Sr. And the restaurant has doubled down on the link with Little Black Sambo, but today depictions are less of an early 20th-century clearly insulting depiction of Black people and more of a late 20th-century vaguely insulting depiction of Indian people. Despite occasional complaints, it remains popular.

IKEA is well known for being the world's largest furniture company, but thanks to its in-store cafeterias, it is also one of the largest restaurant chains. But that status was put in jeopardy when the brand's signature meatballs came under scrutiny.

In February 2013, IKEA announced it was temporarily halting the sale of its meatballs in parts of Europe after DNA tests revealed some incorporated horsemeat. At the time, the Swedish company was selling roughly 150 million meatballs per year, helping drive nearly $2 billion in food sales.

IKEA claimed that previous independent tests showed no irregularities, but food inspectors in the Czech Republic had found trace amounts of horsemeat in a shipment of meatballs labeled as beef and pork. Upon receiving this information, the furniture giant immediately recalled meatballs from stores in roughly a dozen European countries , all of which were produced by the same supplier as the tainted batch. "We hope that by taking decisive action, we can show our customers that we take their concerns seriously," company spokeswoman Ylva Magnusson told the Wall Street Journal. "It's important that our customers feel safe." 

IKEA appears to have weathered the horsemeat storm just fine. As of 2020, the company was selling one billion meatballs globally each year.

In 1992, 79-year-old Stella Liebeck ordered a coffee at a McDonald's drive-thru. What happened next led to what may be the biggest restaurant scandal of all time. While the car was parked, Liebeck put the coffee cup between her knees in order to take off the lid. In the process, she spilled the coffee all over herself. The scalding-hot liquid caused third-degree burns over 16% of her body. Liebeck remained in the hospital for more than a week, in what was just the start of a two-year recovery process.

News of the incident spread across the country after Liebeck filed a lawsuit, sparking a debate over who exactly was to blame. To some, this was simply a case of a woman trying to bill a corporation for her clumsiness. The trial, however, painted a different picture. It turns out that McDonald's had a policy of serving coffee at 180 to 190 degrees, significantly hotter than that of other restaurants. Most damning, however, was the revelation that 700 people had previously been burned by McDonald's coffee. The fast-food giant knew this but never changed its coffee temperature. 

Because of the company's wrongdoing, the jury awarded Liebeck $2.7 million in punitive damages plus an additional $200,000 to cover her medical costs and recovery. These numbers were later reduced to $480,000 and $160,000, respectively, before the two parties agreed to settle the dispute for an amount reported to be less than $500,000.

Most restaurant scandals are the result of company-wide wrongdoing, others can be attributed to a single person. The publicity nightmare Papa John's found itself in several years ago fell into the latter category. Even worse, that single person was none other than founder and chairman John Schnatter.

In May 2018, Schnatter used a racial slur while on a conference call two months earlier. Ironically, the call was being used as a media training exercise for the pizza mogul after he caused a public uproar a year earlier by blaming declining sales on the NFL's national anthem protests. (At the time, Papa John's was the official pizza of the NFL.) "News reports attributing the use of inappropriate and hurtful language to me during a media training session regarding race are true," Schnatter confirmed in a statement (via Forbes). "Regardless of the context, I apologize. Simply stated, racism has no place in our society."

The fallout from Schnatter's derogatory and offensive remark was swift. Just hours after the news came to light, Major League Baseball announced it was indefinitely suspending its Papa Slam promotion, which had been in place since 2016. Later that same day, Schnatter issued his resignation. The pizza chain founder also stepped down from his post on the University of Louisville's board of trustees. 

Nothing will have fast-food customers running for the exits faster than hearing the words "E. coli outbreak." Just ask Jack in the Box, which found itself smack dab in the center of multi-state, foodborne illness outbreak in the 1990s. It all started in January 1993 when the Washington State Department of Health discovered a high number of children in and around Seattle who were suffering from a condition known as hemolytic uremic syndrome. Officials traced the illnesses back to Jack in the Box hamburgers contaminated with E. coli.

In the ensuing weeks, similar cases were reported in California, Idaho, and Nevada. In total, 73 Jack in the Box locations were affected, causing a staggering amount of damage. More than 700 people got sick, including 171 who were hospitalized and four who died.

Things only got worse for the hamburger chain in the outbreak's aftermath. Investigators discovered that the restaurant's parent company, Foodmaker, Inc., ignored warnings from health officials and employees that Jack in the Box was undercooking its hamburgers. (The corporation claimed that cooking the burgers to the required temperature made the patties too tough.) This unwise decision contributed to hundreds of people getting sick and ultimately cost the company millions of dollars to settle legal complaints filed by the victims.

If you were hoping restaurant chains learned their lesson from the Jack in the Box E. coli scandal, think again. In 2020, the Department of Justice charged Chipotle with federal violations for causing several outbreaks by mishandling food. According to authorities, on at least five separate occasions between 2015 and 2018, employees at various Chipotle restaurants across the country failed to follow safety protocols. As a result, food served at these locations became contaminated with norovirus, a highly contagious disease that can cause severe diarrhea, vomiting, and cramping. More than 1,100 people got sick over the three-year period.

Authorities cited stressful work conditions, inadequate staffing, and lack of training as contributors to the safety violations. Chipotle agreed to pay a record $25 million fine and implement an enhanced food safety program. "Today's steep penalty, coupled with the tens of millions of dollars Chipotle already has spent to upgrade its food safety program since 2015, should result in greater protections for Chipotle customers and remind others in the industry to review and improve their own health and safety practices," United States attorney Nick Hanna said in a statement (via FDA).