Why McDonald’s is Suing Their Ex-CEO

August 10, 2020

Fast-food king McDonald’s announced today that they will be suing former CEO Steve Easterbrook. They claim that this lawsuit is due to Easterbrook’s lying about alleged inappropriate sexual relationships with employees. 

The company fired Easterbrook back in November 2019 due to his “poor judgement” in engaging in a consensual relationship with a member of the Mcdonald’s staff, a violation of company policy. 

But the story doesn’t stop there. McDonald’s revealed that they later learned that the former CEO lied and “and destroyed information regarding inappropriate personal behavior.” They claim that he not only had relationships with three other employees but also provided stock worth hundreds of thousands of dollars to one of the employees. 

According to the lawsuit, uncovered evidence includes dozens of nude or sexually explicit photos and videos of women, including images of the female employees, taken in late 2018 or early 2019. He sent these images as attachments from his corporate email account to his personal email. Easterbrook allegedly deleted those photos and emails from his phone before it was searched by an outside investigator. 

The fast-food chain said they would not have signed a separation agreement with Easterbrook had they known about this alleged conduct. They are seeking to recover the compensation and severance benefits they paid Easterbrook under the terms of his departure last year. They have filed a lawsuit in a state court in Delaware which alleges that Easterbrook committed fraud by misleading the company over their separation agreement. The complaint says that Easterbrook “was knowingly untruthful with McDonald’s investigators.” 

Easterbrook’s separation agreement included six months of severance pay in addition to stock options. His exit package has been estimated to be around $40 million. In 2018, Easterbrook’s base pay was $1.3 million, with his total compensation being $15.9 million, including his bonus and stock options. 

“McDonald’s does not tolerate behavior from any employee that does not reflect our values,” Kempczinski, Easterbrook’s successor wrote in a letter to the McDonald’s system about the lawsuit. He went on to say, “These actions reflect a continued demonstration of this commitment.”