In response to McDonald’s seeking the return of his multi-million dollar severance package, ousted former CEO Steve Easterbrook said the company had information about his additional sexual relationships and a significant stock award he gave to an employee.
The fast-food chain said in a filing on August 10 that after receiving an anonymous report in July, it uncovered evidence that Easterbrook hid three physical sexual relationships and approved a stock grant worth hundreds of thousands of dollars for one of those workers.
The restaurant said it found dozens of sexually explicit photos of women on Easterbook’s email. McDonald’s claims these photos and emails weren’t found during the first investigation in October 2019 because Easterbrook deleted them from his phone. However, the lawsuit said Easterbrook didn’t realize that deleting emails from his mail app on his company phone didn’t delete emails stored on company servers.
McDonald’s accused Easterbrook of hiding the information, and said that if it had knowledge of those relationships, it wouldn’t have agreed to the multi-million severance agreement.
According to data solutions firm Equilar, Easterbook’s package is estimated to be around $57.3 million because the brand’s stock is more than 7 percent higher than it was in November when Easterbrook was dismissed, the Wall Street Journal reported.
“Had Easterbrook not deleted evidence from his phone and lied to the Board and its investigators in October 2019, the Board would have known the full record of his conduct when it considered the terms of his separation,” McDonald’s wrote in its lawsuit.
However, Easterbrook and his legal team insist the company had the information at the time. They argued that McDonald’s knew about the stock grant and approved it because of the employee’s performance.
“McDonald’s admits that the ‘new’ information it now relies upon is not new at all,” Easterbrook’s attorney said in a court filing. “Rather, since the outset of the investigation, it was in the company email account stored on the company’s own servers.”
Easterbrook is also looking to move the case from Delaware to Illinois, both the home of McDonald’s and Easterbrook. The Journal said McDonald’s filed in Delaware “based on the company’s own structure and bylaws.”
In a statement, McDonald’s said it “stands by its complaint, both the factual assertions and the court in which it was filed.”
The Journal reported that McDonald’s will likely respond to Easterbrook’s filing.
Easterbrook was fired in November without cause after he revealed a consensual relationship with a McDonald’s employee. The investigation found that it was a “nonphysical, consensual relationship involving texting and video calls.”
The company decided that Easterbrook “violated the Company’s policies prohibiting intimate interactions between employees in a reporting relationship” and that his conduct made it impossible “to trust his ability to steward the Company’s culture.”
He was replaced by Chris Kempczinski, who has attempted to install a culture change after reports of parties and late-night socialization among executives and employees under Easterbrook. In a memo to employees to kick off the new year, Kempczinski emphasized that the company was dedicated to creating opportunity, building community, and collaborating on solutions.
