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McDonald’s Sues Former CEO Steve Easterbrook
Recently identified evidence shows that Easterbrook had physical relationships with three McDonald’s employees in the year before his termination and that he was knowingly untruthful with investigators in 2019.
McDonald’s Corp. is suing Steve Easterbrook, the CEO it fired last year over an inappropriate relationship with an employee. According to NRN, McDonald’s alleged Monday that Easterbrook covered up relationships with other employees, approved stock grants and destroyed evidence.
McDonald’s filed suit in the Court of Chancery of the State of Delaware to recover compensation and severance benefits that would not have been retained by Easterbrook had he been terminated for cause. According to Business Insider, Easterbook collected at least $675,000 in severance.
In July, McDonald’s received an anonymous report alleging that a McDonald’s employee, named as Employee-2, engaged in a sexual relationship with Easterbrook while he was CEO, and two other relationships.
“An internal investigation into this allegation discovered photographic evidence that, while he was CEO, Easterbrook had engaged in a physical sexual relationship not only with Employee-2, but also with two other company employees in the year before his termination,” the complaint alleges.
The lawsuit also alleges Easterbrook “approved an extraordinary stock grant, worth hundreds of thousands of dollars, for one of those employees in the midst of their sexual relationship.”
“Had the board known on Nov. 1, 2019 what it learned in July 2020 regarding Easterbrook’s conduct as CEO, it would not have approved the separation agreement and would have instead terminated Easterbrook for cause,” the company said in a Securities and Exchange Commission filing on Monday. “And had Easterbrook not deleted evidence from his phone and lied to the board and its investigators in October 2019, the board would have known the full record of his conduct when it considered the terms of his separation.”
According to NRN, McDonald’s said it “has taken immediate action to prevent Mr. Easterbrook from exercising any stock options or selling any stock issuable in respect of outstanding equity awards. The company’s complaint alleges that Mr. Easterbrook breached his fiduciary duties as an officer and director of the company and committed fraud. …”
The company's legal action against Easterbrook may not be enough to convince critics and employees that it takes those values seriously. Just last month, a McDonald's franchisee agreed to pay $12,500 to settle a U.S. Equal Employment Opportunity Commission lawsuit claiming that a teenage employee was subjected to a sexually hostile work environment. In April, a $500 million class-action sexual harassment lawsuit claimed female employees faced "severe or pervasive sexual harassment" at around 100 corporate-owned McDonald's restaurants in Florida. Even though McDonald's has acknowledged its issues in the past and pledged to improve, the chain's ever-growing count of sexual harassment infractions proves the brand still has a long way to go.
