Risk & Compliance

McDonald’s Sues Ousted CEO

The company alleges Steve Easterbrook lied about sexual relationships he had with three employees.
Lauren MuskettAugust 10, 2020
McDonald’s Sues Ousted CEO

McDonald’s has filed a lawsuit against ousted chief executive officer Steve Easterbrook alleging he lied to the company about his sexual relationships with employees and misled investigators.

In the filing Monday morning, the company said Easterbrook destroyed records and had physical sexual relationships with three McDonald’s employees in the year before he left the company. It also alleges Easterbrook approved an “extraordinary” stock grant, worth hundreds of thousands of dollars, to one of the employees while the sexual relationship was ongoing.

McDonald’s is seeking to recoup Easterbrook’s termination payout.

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“Easterbrook’s silence and lies — a clear breach of the duty of candor — were calculated to induce the company to separate him on terms much more favorable to him than those the company would have offered and agreed to had it known the full truth of his behavior,” the company said in the suit.

In November, McDonald’s announced Easterbrook was separating from the company after the board determined he had violated company policy and, “demonstrated poor judgment involving a recent consensual relationship with an employee.”

Easterbrook said the “non-physical, consensual relationship involving texting and video calls” was the only one he had ever been involved in, but the company reopened an internal investigation after receiving an anonymous tip last month. McDonald’s said, due to his deception, it was led to believe Easterbrook’s termination could be considered “without cause,” entitling him to greater compensation.

According to data from Equilar, Easterbrook’s severance package was estimated at nearly $42 million.

In a letter to employees, CEO Chris Kempczinski said the company recently became aware of new information regarding Easterbrook’s conduct through an employee report.

“We now know that his conduct deviated from our values in different and far more extensive ways than we were aware when he left the company last year,” Kempczinski said. “McDonald’s does not tolerate behavior from any employee that does not reflect our values.”

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