KEY POINTS

  • McDonalds alleges Easterbrook lied about his affairs with three employees and attempted to destroy evidence of his inappropriate behavior
  • Easterbrook reportedly received some $40 million from his separation agreement.
  • Easterbrook allegedly granted company shares to one of the women he had relationship with

McDonald’s Corp. (MCD) has filed a lawsuit against its former Chief Executive Officer Steve Easterbrook charging that he lied about his relationships with corporate employees during an internal probe into his conduct.

The suit also claims that Easterbrook attempted to destroy nude photos and videos of the employees.

The fast-food giant had fired Easterbrook last November for engaging in a consensual relationship with an employee.

At the time of his firing, McDonald’s said Easterbrook “violated company policy and demonstrated poor judgment involving a recent consensual relationship with an employee.”

Easterbrook apologized for his conduct in light of his termination. “This was a mistake,” Easterbrook wrote to employees then. “Given the values of the company, I agree with the board that it is time for me to move on.”

However, now the company alleges that Easterbrook lied about his affairs with three other employees and attempted to destroy evidence of his inappropriate behavior.

The New York Times reported that the new allegations arose after an anonymous tipster notified the board of other sexual relationships Easterbrook had with employees. He also allegedly granted hundreds of thousands of dollars of company shares to one of those workers.

“That evidence consisted 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 email account to his personal email account,” McDonald’s said in its lawsuit.

As a result on the apparent new evidence, McDonald’s said it would not have signed a separation agreement with Easterbrook when it terminated him. Now the company seeks to recover the compensation and severance benefits Easterbrook received as part of that agreement.

Under terms of that pact, Easterbrook was to receive 26 weeks of severance and was banned from working for a competitor for a period of two years. The New York Times reported he received some $40 million from his separation agreement.

McDonalds also said it will now seek to prohibit Easterbrook from exercising any of his stock options or sell off any stock from outstanding equity rewards.

In 2018, Easterbrook pocketed $15.9 million in total compensation, including his $1.3 million base salary.

The New York Times commented that McDonald’s lawsuit against its former chief “represents an extraordinary departure from the traditional disclose-it-and-move-on decorum that American corporations have often embraced when confronted with allegations of wrongdoing by senior executives.”

Easterbrook’s successor at McDonald’s, Chris Kempczinski, has called for the company to embrace good behavior and integrity.

“McDonald’s does not tolerate behavior from any employee that does not reflect our values,” Kempczinski wrote in an internal 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.”