McDonald’s sues British former CEO over alleged relationships with employees

Edmund Heaphy
·Finance and news reporter
·3-min read
CHICAGO, IL - JUNE 04:  McDonald's CEO Stephen Easterbrook unveils the company's new corporate headquarters during a grand opening ceremony on June 4, 2018 in Chicago, Illinois.  The company headquarters is returning to the city, which it left in 1971, from suburban Oak Brook. Approximately 2,000 people will work from the building.  (Photo by Scott Olson/Getty Images)
McDonald's on Monday launched legal proceedings against its former CEO Stephen Easterbrook. Photo: Scott Olson/Getty Images

McDonald’s (MCD) said on Monday that it had launched legal proceedings against its former British chief executive, Steve Easterbrook, alleging that he lied to the company, destroyed evidence, and concealed sexual relationships with a further three employees.

The fast food giant is hoping to recover the $40m (£30.5m) in compensation and severance benefits that Easterbrook received when he was ousted from the company in November following accusations that he was engaged in a relationship with one of his employees.

“Additional information about Mr Easterbrook’s conduct has recently come to the attention of the board through an employee report and prompted further investigation,” McDonald’s said in a regulatory filing in the US.

According to the filing, the investigation revealed that Watford-born Easterbrook had lied to the company, destroyed information regarding “inappropriate” personal behaviour, and that he had been involved in sexual relationships with three additional McDonald’s employees prior to his ousting.

Intimate relationships with employees are forbidden by company policy.

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The complaint also alleges that that he approved an extraordinary stock grant — worth hundreds of thousands of dollars — for one of those employees during their sexual relationship.

McDonald’s said that, had it been aware of this information, it would not have approved the separation agreement that allowed Easterbrook to receive $700,000 in pay and more than $40m in stock-based benefits.

According to the filing, Easterbrook had previously told McDonald’s investigators that the employee relationship that led to his ousting was “the only one of an intimate nature he had ever had with a McDonald’s employee.”

He also asserted that he had never engaged in a “physical” sexual relationship with any McDonald’s employees.

McDonald’s said on Monday, however, that it had uncovered “undisputable [sic] evidence” that Easterbrook repeatedly violated the company’s policy against intimate relationships with employees, and that he lied during an October 2019 investigation.

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The evidence consists of “dozens of nude, partially nude, or sexually explicit photographs and videos of various women, including photographs of these company employees, that Easterbrook had sent as attachments to messages from his company e-mail account to his personal e-mail account,” the filing says.

A spokesperson for Easterbrook did not respond to a request for comment.

Easterbrook, who is credited with reinvigorating the iconic fast food giant, in 2015 launched a sweeping turnaround plan for the company, arguing that the company needed to focus more on its customers.

Referring to himself as an “internal activist” and a “constructive agitator,” Easterbrook had maintained that the company’s rigid corporate structure prevented it from becoming a "modern, progressive burger company.”

After training as an accountant with PwC, Easterbrook joined McDonald’s in 1993 as a manager in London. He served as chief executive of PizzaExpress and Wagamama before returning to McDonald’s in 2013.