McDonald's: 'We have photos proving Easterbrook's misconduct with staff'

The former McDonald’s CEO said he’d not been sexually involved with other employees, but an email trail of explicit images contradicted his assertion. Now he may have to give back his severance.
Photograph: Shutterstock

The initial reports were scandalous enough: Steve Easterbrook, then-CEO of McDonald’s Corp., had been fired from the most-prominent job in the industry for having a romantic relationship with a female employee, in clear violation of company policies. But those details are PG-rated compared with the particulars that have emerged about Easterbrook’s sexual dealings with other subordinates.

According to a lawsuit filed Monday by McDonald’s to recover its former chief’s 26 weeks of severance pay, Easterbrook had covered up more lurid interactions with three other female subordinates and women outside of the company. The cited proof: “Dozens of nude, partially nude, or sexually explicit photographs and videos of various women, including photographs of these company employees,” according to the action, filed in a Delaware court.

Easterbrook had allegedly forwarded the images from his corporate email account to his personal one, leaving a date-stamped trail of material. McDonald’s said all had been received and transferred in late 2018 and early 2019, or roughly Easterbrook’s last year as CEO.  

Other emails verify that Easterbrook approved a discretionary grant of restricted stock “worth hundreds of thousands of dollars” to one of the three subordinates with whom he’d had a sexual relationship, according to the court documents. She is identified in the filing only as Employee-2.

The filing asserts that Easterbrook deleted all the emails from his mobile phone, not realizing they continued to reside in the company’s servers.  The board found them after fielding allegations from an anonymous source in July that Easterbrook had engaged in sexual activities with women on his staff.

“They are undisputable evidence that Easterbrook lied during the investigation into his behavior in October 2019, when independent outside counsel expressly asked him if he had ever engaged in a physical sexual relationship with any company employee,” the suit asserts.

The pictures and videos directly refute Easterbrook’s assertions to the board of directors during the time leading up to his dismissal that he’d not been involved with any employee other than the one woman he acknowledged courting. Because of his assurance, and input from the woman that the relationship had been consensual and non-sexual, the board opted to dismiss Easterbrook without cause, thinking that would allow the company to push forward in its turnaround efforts.

“After weighing the alternatives, the directors concluded that it would be in McDonald’s best interest if Easterbrook’s separation was accomplished with as little disruption as possible,” the company explained. His firing and removal from the board was announced on Nov. 3. McDonald’s USA President Chris Kempczinski was simultaneously named as his replacement.

There is no doubt that Easterbrook realized he was fooling the board, McDonald’s asserts.  “Knowing that the company was investigating his conduct and evaluating how best to respond to it, knowing that the company was considering whether to terminate him with cause or without, and knowing that revelation of his sexual relationship with Employee-2, coincident approval of her discretionary stock grant, and his relationships with other company employees would ensure his termination for cause, Easterbrook told deliberate falsehoods.  Easterbrook knew,” the lawsuit states.

McDonald’s is seeking recovery of the $702,000 Easterbrook was paid in severance and a block of his exercise of stock options or other forms of deferred compensation. 

Easterbrook could not be reached for comment. The lawsuit indicates he is a citizen of the United Kingdom. 

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