McDonald’s sues fired CEO for ‘lying and concealing evidence in relation to sexual relationships with THREE employees and giving one a batch of shares’ as it tries to recoup his $40 MILLION severance package
Stephen Easterbrook, president and chief executive officer of McDonald’s Corp, 52, was ousted from the restaurant group in Nov 2019 after he admitted to exchanging videos and text messages with an employee
The British CEO was allowed to keep about $40m in stock-based benefits and $670k ,representing 26 weeks of pay, as part of his board-approved ‘without cause’ termination
McDonald’s is now suing Easterbrook for allegedly covering up sexual relationships with three other employee relationships in the year prior to his termination
In a lawsuit filed in Delaware Aug 9, McDonald’s has accused Easterbrook of hiding and deleting evidence of those relationships as he to prevent investigators from learning about them prior to his firing
The restaurant chain says it would not have terminated Easterbrook without cause if it had known of the additional relationships with the implied financial penalties
McDonald’s is now attempting to block Easterbrook from exercising his stock options and is seeking compensatory damages
Stephen Easterbrook [photo], president and chief executive officer of McDonald’s Corp was ousted from McDonald’s in November last year after he admitted to exchanging videos and text messages with an employee
McDonald’s is suing its former CEO, who was fired last year for having an inappropriate relationship with an employee, after claiming he covered the extent of his infractions for financial gains.
The US restaurant chain claims it’s former CEO is a serial offender who covered up the fact that he had sexual relationships with three other workers and destroyed evidence so he wouldn’t be caught.
British born Stephen Easterbrook, 52, was ousted from his $16 million-a-year job McDonald’s in November last year after he admitted to exchanging videos and text messages with an employee in a non-physical, consensual relationship.
Easterbrook, who told the fast food company that there were no other similar instances, was allowed to keep about $40 million in stock-based benefits and six months pay, which amounted to about $670,000 in compensation, as part of his ‘without cause’ severance agreement.
In a lawsuit filed in Delaware Aug 9, McDonald’s says it received an anonymous tip last month that led to the discovery of sexual relationships between Easterbrook and three other employees in the year prior to his termination.
Among the revelations in the lawsuit, McDonald’s alleges that as CEO, Easterbrook also approved an ‘extraordinary’ stock grant, worth hundreds of thousands of dollars, for one of those employees during their sexual relationship.
Easterbrook [photo] was fired because he had relationships with employees while CEO. The company has accused Easterbrook of deleting evidence of those relationships from his cell phone, including sexually explicit photos and videos sent from corporate email accounts, in a bid to prevent investigators from learning about them prior to his firing
The company has accused Easterbrook of deleting evidence of those relationships from his cell phone, including sexually explicit photos and videos sent from corporate email accounts, in a bid to prevent investigators from learning about them prior to his firing.
‘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,’ the lawsuit says.
The emails were sent in late 2018 and early 2019, according to the lawsuit.
The filing argues that the photos prove Easterbrook initially lied to investigators.
McDonald’s said in the lawsuit that Easterbrook’s board-approved separation agreement was based on what the company knew at the time.
The lawsuit says McDonald’s would not have terminated Easterbrook without cause if it had known of the additional relationships.
‘Easterbrook’s silence and lies – a clear breach of the duty of candor – were calculated to induce the company to separate him on terms much more favorable to him than those the company would have offered and agreed to had it known the full truth of his behavior,’ McDonald’s said in the filing.
‘Had Easterbrook been candid with McDonald’s investigators and not concealed evidence, McDonald’s would have known that it had legal cause to terminate him in 2019.’
Easterbrook, a divorcé and father-of-three from Watford, United Kingdom, joined the company in 1993 and had been chief executive since March 2015. He and his wife divorced in 2015 – the same year he became McDonald’s CEO and relocated to Chicago from the UK where he had been the company’s head of North Europe.
Under his leadership the company’s shares nearly doubled in value while sales at its US locations stagnated.
At the time he was pushed out, McDonald’s said Easterbrook had violated company policy by engaging in a consensual relationship with an employee. McDonald’s forbids managers from having romantic relationships with direct or indirect subordinates.
In an email to employees at the time, Easterbrook acknowledged he had a relationship with an employee and said it was a mistake.
‘Given the values of the company, I agree with the board that it is time for me to move on,’ Easterbrook said in the email at the time.
At the time of his firing, lawyers from McDonald’s had viewed messages on Easterbrook’s company phone but did not thoroughly search his email records.
The second and more in depth investigation, which was initiated last month, uncovered emails that had been deleted.
It is not yet clear why a thorough search was not carried out the first time.
At the time of his dismissal, the company said Easterbrook was eligible for six months of severance pay, which would have been $675,000. He was also eligible for prorated payment for hitting 2019 performance targets.
Under McDonald’s severance plans, the company says it has the right to claim back any payouts if it determines employees have been dishonest and there is evidence they could have been fired with cause.
McDonald’s said this clause in the agreement also applied to Easterbrook.
The company is now attempting to block Easterbrook from exercising his stock options and is seeking compensatory damages.
Expanding on the serial nature of Easterbrook’s liaisons, after he was fired last year, it emerged he had previously escaped censure for another office romance. Easterbrook had dated Denise Paleothodoros, 46, when she was assigned to the McDonald’s account by her PR firm.
The two-year affair came to light in 2015 but McDonald’s concluded the relationship did not violate its policies, but Paleothodoros was removed from the McDonald’s account at the time to ‘avoid any conflict of interest’.