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McDonald's sues ex-boss Easterbrook over sexual relationships McDonald's sues ex-boss Easterbrook over alleged sexual relationships
(about 2 hours later)
McDonald's has taken new legal action against former chief executive Steve Easterbook, accusing him of lying about sexual relationships with staff.McDonald's has taken new legal action against former chief executive Steve Easterbook, accusing him of lying about sexual relationships with staff.
The company fired Mr Easterbrook last year after finding he had a consensual relationship with an employee.The company fired Mr Easterbrook last year after finding he had a consensual relationship with an employee.
But the firm says further investigation found Mr Easterbook had three additional relationships with staff, about which he lied to the board. But the firm says further investigation found the British executive had three additional relationships with staff, about which he lied to the board.
McDonald's is suing to recover his pay-off, reportedly worth $40m (£35m).McDonald's is suing to recover his pay-off, reportedly worth $40m (£35m).
The fast food giant said in a filing to regulators that information had "recently come to the attention of the Board through an employee report", prompting further investigation. The fast food giant prohibits "any kind of intimate relationship between employees in a direct or indirect reporting relationship".
"Based on the results of the investigation, the Board concluded that Mr. Easterbrook lied to the company and the Board and destroyed information regarding inappropriate personal behaviour and in fact had been involved in sexual relationships with three additional company employees prior to his termination, all in violation of company policy," it said. At the time of Mr Easterbrook's removal in November, McDonald's said it had evidence of only of a non-physical, consensual relationship, consisting of intimate text messages and video calls.
McDonald's said that had it been aware of this information, it would not have approved the severance terms. It agreed to terminate Mr Easterbrook's contact "without cause", fearing a protracted legal battle, according to the firm's legal filing.
But after receiving a tip from an employee in July, the fast food giant started a second investigation, which uncovered "undisputable evidence" of three other sexual relationships.
It says investigators found nude photographs sent from Mr Easterbrook's company email account as well as messages showing that he approved a grant of company shares worth hundreds of thousands of dollars to one of the employees "shortly after their first sexual encounter".
McDonald's said that had it been aware of this information, it would not have approved his multi-million dollar pay-off.
'Undisputable evidence''Undisputable evidence'
McDonald's said it did not initially find the photos and messages because Mr Easterbrook had deleted them from his phone. The second investigation also searched company servers.
It said Mr Easterbrook violated his duty to the company by lying when asked about his behaviour in an effort to secure a bigger severance package, committing fraud.
Mr Easterbrook, who is divorced, could not immediately be reached for comment. At the time of his dismissal, he acknowledged a relationship in an email to staff, calling it a "mistake".
"Given the values of the company, I agree with the board that it is time for me to move on," he wrote.
Mr Easterbrook, a UK citizen who grew up in Watford, Hertfordshire, led McDonald's from March 2015 to November 2019, after previously leading its UK operations.Mr Easterbrook, a UK citizen who grew up in Watford, Hertfordshire, led McDonald's from March 2015 to November 2019, after previously leading its UK operations.
At the time of his removal in November, McDonald's said it had evidence of only of a non-physical, consensual relationship, consisting of intimate text messages and video calls. He was widely credited with revitalising the firm's menus, remodelling stores and using better ingredients. The value of its shares more than doubled during his tenure in the US.
It agreed to terminate his contact "without cause", fearing a protracted legal battle, according to the firm's legal filing. Last year, he received more than $17m in total compensation.
But the new investigation uncovered "undisputable evidence" of three other sexual relationships, it says. Broader pattern?
It says investigators found nude photographs sent from Mr Easterbrook's company email account as well as messages showing that he approved a grant of company shares worth hundreds of thousands of dollars to one of the employees "shortly after their first sexual encounter". The size of Mr Easterbrook's severance package had drawn earlier pushback, including from a shareholder advisory group.
McDonald's said its policies prohibit "any kind of intimate relationship between employees in a direct or indirect reporting relationship". The firm has also faced accusations that it has not taken sexual harassment seriously.
Mr Easterbrook could not immediately be reached for comment. In April, US workers filed a class-action lawsuit against McDonald's, accusing the fast food giant of fostering "systemic sexual harassment".
A global coalition of labour unions filed a similar complaint with the Organization for Economic Cooperation and Development in May.
At the time, one of the organisers, Sue Longley, general secretary of the International Union of Foodworkers, said the firm had a "culture rotten from the top".