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Former CEO: McDonald’s Knew About Sexual Misconduct While Negotiating Multimillion-Dollar Severance

The fast-food giant has accused Steve Easterbrook of lying, fraud, and concealing evidence of sexual relationships with employees

Steve Easterbrook standing at podium with McDonald’s sign behind him.
McDonald’s is suing its former CEO Steve Easterbrook for allegedly committing fraud and lying regarding inappropriate relationships with employees.
Photo by Scott Olson/Getty Images

It looks like McDonald’s and its former CEO are not holding back in legal fight

Former McDonald’s CEO Steve Easterbrook has fired back against his ex-employer, alleging that the fast-food company’s lawsuit accusing him of lying, fraud, and concealing evidence of sexual relationships with employees is “meritless” and “misleading,” Bloomberg reports.

As previously reported, McDonald’s fired Easterbrook last fall for demonstrating “poor judgment” and violating company policy by engaging in an inappropriate relationship with an employee. At the time, the relationship was believed to be consensual and non-physical. But according to McDonald’s lawsuit — which seeks to recover the estimated tens of millions that Easterbrook had received in severance — the company recently received an anonymous tip that led them to discover that Easterbrook had engaged in physical, sexual relationships with a total of three employees, as evidenced by nudes that he had sent to his personal email address from his work email account (and later deleted from his company phone).

But in a Friday court filing, Easterbrook’s attorney alleges that McDonald’s had had access to the full facts of the situation at the time that it negotiated the severance package (or, as the New York Post so eloquently puts it, “McDonald’s ex-CEO claims company should have known about his sexting”). Per the Wall Street Journal, Easterbrook’s attorney said that the former CEO’s emails were available to McDonald’s and stored on company servers when the initial investigation took place last October. “Based on the very same information McDonald’s has today, it negotiated a separation agreement,” wrote Easterbrook’s attorney. “But McDonald’s admits that the ‘new’ information it now relies upon is not new at all.”

Easterbrook’s filing also takes aim at McDonald’s allegation that he had granted stocks worth hundreds of thousands of dollars to one of the employees he had engaged in a sexual relationship with. Easterbrook’s attorney argues that McDonald’s board of directors had been aware of and had approved the special stock grant based on performance, according to the WSJ.

“McDonald’s – a sophisticated entity represented by numerous internal and external experts when it entered into the Separation Agreement – is aware that it cannot credibly allege a breach of contract claim,” Easterbrook’s legal team wrote in the filing. “Instead, it improperly seeks to manufacture claims for a breach of fiduciary duty or fraud.”

In response to the motion to dismiss the lawsuit, a McDonald’s spokesperson provided the following statement: “McDonald’s stands by its complaint, both the factual assertions and the court in which it was filed.”

Update: August 18, 2:25 p.m.: This post has been updated to include a statement from McDonald’s.

And in other news…

  • After returning a $10 million Payment Protection Program (PPP) loan amid criticism for taking a “small business” loan, Potbelly has accepted another $10 million loan that it’s going to keep this time, stating that the money will go toward its employees as the business continues to operate below pre-COVID sales levels. [Eater Chicago]
  • Up to 300 Pizza Hut locations are closing in the wake of their operating franchisee, NPC International, filing for bankruptcy. This should keep the subreddit r/FormerPizzaHuts busy for a while. [CNBC]
  • Food waste fell thanks to the pandemic, with many people saying they want to maintain their frugality and adoption of less wasteful habits. [Reuters]
  • DoorDash has become the official delivery partner of the NBA. [Forbes]
  • Pumpkin spice hard seltzer… who asked for this…… [Delish]
  • An oral history of The Simpsons’ “steamed hams” scene. [Mel Magazine]

All AM Intel Coverage [E]

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