McDonald’s is suing its former CEO Steve Easterbrook, who was fired last fall for violating company policy by engaging in an inappropriate relationship with an employee.
At the time, Easterbrook alleged — and an outside investigation affirmed — that the relationship was consensual and non-physical (consisting of texting and video calls), and the only relationship that Easterbrook had ever had with a McDonald’s employee. But according to the lawsuit that McDonald’s filed in a state court in Delaware, the company received an anonymous tip in July, alleging that Easterbrook had had a sexual relationship with another employee during his time as CEO. While investigating this claim, the company found that Easterbrook had engaged in physical, sexual relationships with a total of three employees as CEO.
Per the lawsuit, Easterbrook had also sent nudes and sexually explicit photos and videos of women, including those of the aforementioned employees, from his work email account to his personal email account. Easterbrook had deleted the photos, taken between late 2018 and early 2019, from his company phone when he turned it over for the investigation last fall — but the photos apparently still existed on his work email account on the McDonald’s servers, the company discovered last month.
The lawsuit also alleges that Easterbrook had approved a special discretionary grant of restricted stock units worth hundreds of thousands of dollars to one of the employees after their first sexual encounter, within days before their second encounter.
These transgressions constitute not just generally unethical scumbag behavior, but more pertinent to the lawsuit, lying, concealing of evidence, and fraud as they relate to Easterbrook’s separation package from McDonald’s. Last fall, the board of directors had the choice to either terminate Easterbrook “with cause” or “without cause.” The former, which would have deprived Easterbrook of all severance benefits, would have required evidence that Easterbrook’s conduct had constituted “dishonesty, fraud, illegality or moral turpitude.” According to the lawsuit, the board believed that following following that route would be “certain to embroil the Company in a lengthy dispute” with Easterbrook, so they chose to fire him “without cause” instead. As a result, Easterbrook walked away with a severance package estimated to be worth $42 million, according to executive compensation data company Equilar. McDonald’s is now suing to get the full amount back.
“McDonald’s does not tolerate behavior from any employee that does not reflect our values,” wrote current CEO Chris Kempczinski in an internal memo telling employees about the lawsuit and Easterbrook’s actions. “As we recommit to our values, now, more than ever, is the time to lean in to what we stand for and act as a positive force for change.”
Issues and accusations of sexual harassment have plagued McDonald’s at all levels in recent years. A former employee at a New Jersey McDonald’s filed a suit last week, alleging that she faced sexual and racist harassment as retaliation for calling out her restaurant’s unsanitary conditions. In 2018, ten women filed a complaint with the Equal Employment Opportunity Commission after all facing harassment at their various stores. In 2016, Fight for 15 filed a complaint alleging rampant sexual harassment on behalf of 15 workers. In all of the cases, McDonald’s responded with near identical language, stating some variation of: “At McDonald’s Corporation, we are and have been committed to a culture that fosters the respectful treatment of everyone. There is no place for harassment and discrimination of any kind in our workplace. McDonald’s Corporation takes allegations of sexual harassment very seriously.”
More seriously, perhaps, when the misconduct costs the company an alleged $42 million.