5 Red Onion Units Face Suspension of Liquor Sales

Liquor licenses at Red Onion restaurants in Santa Ana, Fullerton and three other locations will be briefly suspended as a result of a state investigation that found racial discrimination at the popular Southern California chain.

“There was a pattern of racial discrimination practiced at various Red Onion premises,” said John W. Thompson, assistant director of the state Department of Alcoholic Beverage Control’s Southern Division. He said it was the first time the ABC had suspended an establishment’s license for violating state discrimination laws.

Thompson said Red Onion officials, who have repeatedly denied any wrongdoing, have agreed to the suspension, which will occur in May.

“Under the circumstances, it’s a fair resolution of a difficult problem,” said Ralph Saltsman, attorney for the Red Onion. “I’m glad that we will have reached peace with the ABC.”

Under terms of the agreement, which is expected to be put in final form next week, Red Onion outlets in Santa Ana, Riverside and Palm Desert were given 30-day liquor license suspensions, with 20 days stayed, meaning the suspensions would last 10 days.

Agreed to Suspensions

Two other Red Onion restaurants, in Fullerton and Lakewood, agreed to 30-day suspensions, with 25 days stayed as long as no further violations occur.

“They can stay open for food or soft drinks for that time, but no alcohol,” Thompson said. Red Onion officials declined to say how much the suspension at five of their 14 locations will cost them in liquor sales.

Thomas Keasling Jr., district administrator for the ABC in San Bernardino, said he hoped that the ruling would put other establishments on notice that their licenses could be suspended or revoked if they discriminate.

“This is California, 1987,” Keasling said. “We’re supposed to be the leaders in setting examples for the rest of the country and the world for getting along with each other and living a life style where this type of activity is unthinkable and intolerable.”

Allegations about racial bias at the Red Onion arose last April when two blacks, two Latinos and two Middle Easterners alleged that they were stopped at the front door of the chain’s Santa Ana disco because, they were told, the photos on their driver licenses did not look like them or they failed to meet the dress code.

After the media reported the allegations, several former restaurant employees said they had been ordered to enforce a policy of discrimination. A former bartender told The Times that he had been instructed to “clean up the crowd” when it became “too dark.”

Plan for Correction

Dozens of complaints from minority patrons followed, resulting in a flurry of governmental investigations and civil lawsuits against the Carson-based company. In July, the company announced a far-reaching plan to correct what it called “the perception of a problem,” including the adoption of a non-discriminatory hiring and training policy, an outreach program to minority communities and a nationwide search for minority vendors with whom to do business.

The Red Onion this week reiterated its position that it did not discriminate against minorities.

Thompson said that company officials had “added a note to the stipulation that they don’t admit the facts alleged in the accusation or any liability therefore.”

“This agreement,” officials wrote, “does not constitute an admission.”

The agreement with the ABC is the second the Red Onion has reached with state agencies.

Last year, under a settlement with the state Department of Fair Employment and Housing, the Red Onion agreed to pay $500 each to 39 people who complained that they were kept out of the restaurants because of racial bias.

49 Instances Documented

Thompson said the ABC conducted a nine-month inquiry into admission practices at the Red Onion, interviewing 200 former and current Red Onion employees as well as patrons who had sought entrance to the restaurants’ discos. He said investigators documented 49 instances of racial discrimination at the Santa Ana location, 12 in Riverside, 9 in Palm Desert, 2 in Lakewood and 1 in Fullerton.

“It’s one of those things that occur occasionally,” said Thompson, adding: “Usually when complaints are brought to the attention of the licensees, it’s stopped right away.”

Red Onion president Ron Newman declined to be interviewed.

Rusty Kennedy, the executive director of the Orange County Human Relations Commission, said he was pleased with the ABC’s ruling.

“I think it’s positive that a state organization did an investigation, made findings and (has) taken punitive action against the perpetrators of the discrimination,” Kennedy said. “That, coupled with the settlement of the Department of Fair Employment and Housing and the (pending) civil lawsuits . . . should prove a good deterrent to other restaurants, discotheques and entertainment places in Orange County that this isn’t a very good place to discriminate.”

Sam Crawford, an Irvine salesman who filed suit against the Red Onion last year after he was turned away from the Santa Ana disco because his driver license appeared tattered, said: “It comes as no surprise to me that the ABC discovered discrimination, especially at the Red Onion in Santa Ana, since I had my own individual problem with the door host.”

A separate investigation into complaints of racial dicrimination has been completed by the FBI. Special Agent Jim Neilson of the FBI’s Los Angeles office confirmed Friday that the bureau’s report has been sent to the U.S. attorney’s office in Los Angeles.