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McDonald's Goes After Former CEO's Severance Payment In Lawsuit, Says He Lied About Employee Relationships

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McDonald's Goes After Former CEO's Severance Payment In Lawsuit, Says He Lied About Employee Relationships

McDonald's (NYSE: MCD) is suing former CEO Steve Easterbrook to recover severance payments following an internal probe that found that Easterbrook had sexual relationships with three employees, the company said in a Monday SEC filing

McDonald's is suing Easterbrook for the amount of his exit package — around $40 million — in Delaware's Court of Chancery. 

What Hapened: In October 2019, McDonald's had learned of an allegation that Easterbrook engaged in an inappropriate personal relationship with a McDonald’s employee, the company said.  The board commissioned an investigation of the allegation.

The investigation confirmed that the alleged relationship had occurred and revealed that it had been a non-physical, consensual relationship involving texting and video calls, according to McDonald's. 

Easterbrook told internal investigators the relationship was the only one of an intimate nature he had ever had with a McDonald’s employee, the company said, Easterbrook said he never engaged in a physical sexual relationship with any McDonald’s employee, the company said. On Nov. 1, the McDonald’s board fired  Easterbrook.

Why It's Imortant: The board concluded that Easterbrook violated company policy by engaging in an inappropriate relationship with a subordinate, but also that his conduct demonstrated poor judgment that disqualified him from continued service as the CEO.

MCD Price Action: McDonald's shares were trading down 0.67% at $203.25 at last check Monday. The stock has a 52-week high of $221.93 and a 52-week low of $124.23.

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Photo courtesy of McDonald's. 

 

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