When McDonald's canned Stephen Easterbrook as CEO in 2019 for having what he and the company described as a consensual relationship with an employee, the parting was relatively straightforward — and highly lucrative for the ousted CEO, who walked away with a compensation package reportedly worth more than $40 million. Eight months later, the fast-food giant is suing its former chief executive to recoup the money, claiming he had sexual relationships with multiple employees and tried to cover them up.
In a lawsuit filed Monday in Delaware, McDonald's accuses Easterbrook of having relationships with an additional three employees in the year before his termination, alleging he "concealed evidence and lied about his wrongdoing." The suit further alleges that Easterbrook approved an extraordinary stock grant worth hundreds of thousands of dollars for one of the workers.
The company's case against Easterbrook includes dozens of naked or explicit photographs and videos of different women — including some McDonald's employees — that Easterbrook allegedly sent as attachments to his personal email account from his work account in late 2018 or early 2019.
Lawyers representing Easterbrook didn't immediately respond to emails requesting comment.
McDonald's contends Easterbrook's exit should not have included severance pay because the company had reason to fire him for cause and he deceived company investigators, according to the complaint.
An employee recently came forward with new information regarding Easterbrook's conduct, which "deviated from our values in different and far more extensive ways than we were aware when he left," wrote Easterbrook's replacement, Chris Kempczinski, in a note to employees. "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."
At the time, Easterbrook told McDonald's employees in an email that he agreed with the board that it was time for him to move on. He also offered congratulations to Kempczinski on his promotion, saying: "I know you will support him as you have supported me — he's lucky to have a team of your caliber."
McDonald's executive severance policy for executives states that an employee's termination will be defined as "for cause" when there is a "material violation of McDonald's standards of business conduct or other employment policies."
In November, McDonald's board of directors opted to classify Easterbrook's termination as "without cause." That entitled him to $675,000 in severance and health insurance benefits and stock awards valued in the tens of millions.
Until his exit, Easterbrook was highly regarded for introducing technological innovations such as touch-screen ordering, with McDonald's shares roughly doubling in value during his more than four years at the helm. The England native had previously worked at the company for almost two decades.
First published on August 10, 2020 / 4:20 PM
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