McDonald’s Accuses Former CEO of Lying about Sexual Relationships

    The fast-food chain uncovered additional evidence after receiving an anonymous report.

    Fast Food | August 2020 | Ben Coley
    The exterior of a McDonald's restaurant.


    Easterbrook was fired in November after he revealed a consensual relationship with a McDonald’s employee.

    Former McDonald’s CEO Steve Easterbrook concealed evidence and lied about additional sexual relationships he had with employees, according to a lawsuit filed Monday morning by the fast-food chain.

    According to court documents, McDonald’s said it uncovered evidence that Easterbrook hid physical sexual relationships with three employees in the year before he was fired and approved a “extraordinary” stock grant worth “hundreds of thousands of dollars” for one of those workers during the relationship. The company is accusing Easterbrook of intentionally misleading investigators in 2019.

    McDonald’s is suing for about $40 million, the amount of Easterbrook’s severance package, according to data solutions firm Equilar.

    “These actions constitute breaches of Easterbrook’s duties to McDonald’s,” the brand said in the lawsuit. “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 and would not have agreed that his termination was ‘without cause.’”

    Easterbrook was fired in November 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.”

    However, in July McDonald’s received an anonymous report alleging that another employee was in a sexual relationship with Easterbrook during his time as CEO.

    An investigation found photographic evidence proving this allegation, as well as sexual relationships with two other employees. According to the lawsuit, the evidence included dozens of nude, partially nude, or sexually explicit photos and videos of women that Eastbrook 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.

    McDonald’s claims these photos and emails weren’t found during the first investigation in October 2019 because Eastbrook deleted them from his phone. However, the lawsuit states Easterbrook didn’t realize that deleting emails from his mail app on his company phone didn’t delete emails stored on company servers.

    “The photographs are undisputable evidence that Easterbrook repeatedly violated the Company’s prohibition of any kind of intimate relationship between employees in a direct or indirect reporting relationship,” McDonald’s wrote in the lawsuit. “They are undisputable evidence that Easterbrook lied during the investigation into his behavior in October 2019, when independent outside counsel expressly asked him if he had ever engaged in a physical sexual relationship with any Company employee.”

    The timestamps of photographs also show that Easterbrook approved a “special discretionary grant of restricted stock units” worth hundreds of thousands of dollars to one employee after their first sexual encounter and within days of their second.

    Monday’s filing also said Easterbrook made decisions about the employee’s “compensation while engaged in an improper sexual relationship with her.”

    “Had the Board known on November 1, 2019 what it learned in July 2020 regarding Easterbrook’s conduct as CEO, it would not have approved the Separation Agreement and would have instead terminated Easterbrook for cause,” the lawsuit said. “And 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.”

    Easterbrook began his tenure as McDonald’s CEO in 2015. He was replaced by Chris Kempczinski in November.