Aug 10, 2020 - Economy

McDonald's sues former CEO, alleging he lied about relationships with employees

Fadel Allassan

McDonald's on Monday sued its former CEO Steve Easterbrook, seeking to recoup tens of millions in severance benefits while alleging he took part in and concealed undisclosed relationships with company employees, per the New York Times.

Why it matters: Corporations have traditionally chosen to ignore executive misbehavior to avoid bad press, but they have become more proactive — especially with the rise of the #MeToo and Black Lives Matter movements — in addressing issues head-on.

The state of play: Easterbrook was fired last fall after McDonald's discovered that he had taken part in a consensual relationship with an employee and violated company policy.

The lawsuit alleges Easterbrook had additional consensual relationships with three employees in his final year at the company, and gave company shares to one of them.
McDonald's claims that Easterbrook defrauded the company by covering up these additional relationships and wants to recuperate some $40 million in stock options and other compensation it let him keep after his ouster.

What they're saying: "McDonald’s does not tolerate behavior from any employee that does not reflect our values," wrote current CEO Chris Kempczinski in a company memo.

"As we recommit to our values, now, more than ever, is the time to lean in to what we stand for and act as a positive force for change."

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McDonald's sues former CEO, alleging he lied about relationships with employees

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