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McDonald's suit against former CEO: 'He lied and destroyed evidence'

McDonald's has sued former CEO Steve Easterbrook for $40 million after the company said he violated company policies, lied and destroyed nude photos related to his alleged sexual relations with three employees.

Photo: iStock

August 11, 2020

On the heels of a damning article about an alleged systemic sexual harassment problem at McDonald's entitled, "McDonald's Has a Real Sexual Harassment Problem" in the Nation this month, comes news this week that the fast-food giant has sued former CEO Steve Easterbrook. The suit — filed Monday in Delaware Chancery Court and reported in SEC filings — alleges that Easterbrook had three sexual relationships with employees and sent nude photos of them via company email.

It follows Easterbrook's ouster about nine months ago after the chain said he violated company policy by having a consensual relationship with another employee.

The case requests $40 million — about $1.8 million under what NPR reported that he obtained in severance when released from the company after almost five years as its top executive last year.

"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."

-McDonald's CEO Chris Kempczinski

The suit, which is reportedly the result of an investigation following an anonymous employee, also alleges that Easterbrook approved an "extraordinary" stock grant of several hundred thousands of dollars to one of the employees he was involved with following his first sexual encounter with the individual. Those allegations were made even though Easterbrook told investigators that he had no sexual relations with employees at the Chicago-based fast food company.

In a letter to employees Monday, Easterbrook's successor, Chris Kempczinski, underscored that his predecessor's alleged relationships was something of an exception that violated the values of the company "in different and far more extensive ways" than any other previous incident.

Additionally, Kempczinski encouraged employees to report any actions that deviate from the company "values."

"We recently became aware through an employee report of new information regarding the conduct of our former CEO, Steve Easterbrook," Kempczinski told the brand's workforce. "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.

"While the board made the right decision to swiftly remove him from the company last November, this new information makes it clear that he lied and destroyed evidence regarding inappropriate personal behavior and should not have retained the contractual compensation he did upon his exit. As such, the company, at the direction of the Board of Directors, has filed litigation to recover the compensation he retained upon his departure from McDonald's and align his exit payout with a 'for cause' termination."

Kempczinski said that the brand's newly named Chief People Officer Heidi Capozzi has been developing a program to further "support our employees, customers, and suppliers."

"As part of the work we've initiated around our values refresh, we are partnering with a third party to conduct a cultural assessment, including a global survey and listening sessions, to provide us with a better understanding of both the bright spots and blind spots we have around our values," Capozzi told employees in a letter obtained by QSRweb. "The insights from this work will highlight the strengths we can share and scale as well as opportunities for improvement. We will share the results of the cultural assessment in November, along with key next steps that further demonstrate our commitment to putting people first.

"In addition to the assessment, you will begin to see the refreshed values embedded and reinforced across many of our practices and importantly in how we make business and people decisions."