McDonald’s: Easterbrook’s Claims Have ‘No Legal Merit’

    The fast-food chain argues that the former CEO should be held responsible in court. 

     

    Fast Food | August 2020 | Ben Coley
    Exterior of a McDonald's restaurant.
    McDonald's
    McDonald’s called Easterbrook’s filing a “brazen attempt at table-turning.”

    The fast-food chain argues that the former CEO should be held responsible in court.

    In a new filing Monday, McDonald’s wrote a critical response to Steve Easterbrook, claiming the former CEO should have to explain his misdeeds in court.

    On August 10, McDonald’s filed a lawsuit alleging Easterbrook hid three sexual relationships with employees and approved a stock grant worth “hundreds of thousands of dollars” for one of those workers.

    Easterbrook responded by claiming that McDonald’s had information at the time of his dismissal in November and that the company knew about the stock grant. He also wanted to move the case from Delaware to Illinois, where McDonald’s is headquartered.

    “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.”

    McDonald’s called Easterbrook’s filing a “brazen attempt at table-turning.”

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    “Easterbrook’s suggestion that, his lies notwithstanding, McDonald’s got a good enough deal by ridding itself of him has no legal merit,” the company said in a court filing.

    Easterbrook was fired in November after revealing a consensual relationship with an employee. But in July, McDonald’s received an anonymous report alleging that another employee was in a sexual relationship with Easterbrook during his time as CEO. 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.

    McDonald’s accused Easterbrook of deleting the evidence from his phone. However, the photos and videos remained on the company’s server. McDonald’s said that if it had known about the additional relationships at the time, Easterbrook would’ve been fired with cause. The fast-food chain is now trying to recover the former CEO’s severance package, which now exceeds $55 million, according to data solutions firm Equilar.

    In defending its investigation last year, McDonald’s said the photographs and videos would have been “buried somewhere in the tens of thousands of his emails.”

    “When McDonald’s investigated, Steve Easterbrook lied. He violated the Company’s policies, disrespected its values, and abused the trust of his co-workers, the Board, our franchisees, and our shareholders,” the fast-food chain told CNBC. “His argument that he should not be held responsible for even repeated bad acts is morally bankrupt and fails under the law.”

    McDonald’s is also investigating whether Easterbrook covered up for other employees and looking into misconduct within the human resources department. Heidi Capozzi, the brand’s new human resources leader, has led an interview review of the department since April, looking into hiring practices, performance evaluations, and how the department handles employees’ concerns.

    Her predecessor, David Fairhurst, was fired shortly after Easterbrook in November. During an online meeting obtained by the Wall Street Journal, Capozzi told employees that Fairhurst was dismissed for cause for “making women at the company feel uncomfortable on numerous occasions at business events.”  Additionally, Melanie Steinbach, who was promoted to McDonald’s U.S. chief people officer in June, left the company in August for unknown reasons.

    As part of the human resources investigation, the company is partnering with a consulting firm to conduct surveys and interviews with employees.