Former McDonald’s CEO Argues He Should Keep Severance

    The package is valued north of $55 million. 

    Fast Food | September 2020 | Ben Coley
    McDonald's Golden Arches.
    Unsplash
    McDonald’s said it remains undeterred in its pursuit of Easterbrook’s severance package.

    Ousted McDonald’s CEO Steve Easterbrook said he deserves to keep his severance package because he hasn’t violated the terms of the agreement, according to court documents.

    McDonald’s is currently in a back-and-forth legal battle with Easterbrook in which the fast-food giant is attempting to recoup the former CEO’s severance package. That payout is estimated to be about $57.3 million, according to data firm Equilar.

    Easterbrook was fired in November without cause after it was revealed he had a consensual relationship with an employee. In August, McDonald’s filed a lawsuit alleging that Easterbrook hid three sexual relationships and approved a stock grant worth “hundreds of thousands of dollars” for one of those workers.

    After receiving an anonymous tip in July, a further investigation found dozens of nude, partially nude, or sexually explicit photos and videos of women that Easterbrook sent as attachments to messages from his McDonald’s email to his personal account. All the photos were taken between late 2018 and early 2019.

    The company accused Easterbrook of deleting messages from his phone, but not removing them from the servers. The chain is adamant that if it had known about the multiple affairs at the time of the separation agreement, it wouldn’t have agreed to the terms.

    In the court filing, Easterbrook said he should keep his package because he’s complied with the terms, such as not speaking publicly about McDonald’s, refraining from filing a lawsuit against the company, sending apology letters to employees, and not working for a rival company. By McDonald’s attempting to recoup the funds, the former CEO said the chain is not holding up its side of the agreement. Daniel Herr, Easterbrook’s lawyer, wrote in the filing that “McDonald’s received the entire benefit of its bargain.”

    McDonald’s said it remains undeterred in its pursuit of Easterbrook’s severance package. 

    “Steve Easterbrook lied and destroyed evidence to conceal his inappropriate conduct and impede the investigation into his behavior,” McDonald’s said in a statement. “He cannot hide behind baseless technical arguments.”

    Easterbrook and his legal team have insisted that McDonald’s had access to the information on the company servers in October, and terminated him without cause to move on from the debacle. In the recent filing, Herr said “any attempt by McDonald’s to point to ‘new’ information is futile.”

    In addition to the fight over the severance, McDonald’s is also investigating whether Easterbrook covered up for other employees and looking into misconduct within the human resources department. Since starting in April, Heidi Capozzi, the head of human resources, has led an internal review examining hiring practices, performance evaluations, and how the department handles employees’ concerns. She formed a global, cross-functional advisory council to “holistically identify and address areas where McDonald’s can be a catalyst for change.

    The company is now partnering with a consulting firm to conduct surveys and interviews with workers in order to provide “a better understanding of both the bright spots and blind spots we have around our values.”