McDonald's revealed Thursday that it settled a lawsuit against former CEO Steve Easterbrook, with the burger chain recovering $105 million in severance.
Easterbrook was terminated in November 2019 after disclosing a consensual relationship with a fellow employee. The executive was fired without cause and provided a severance package of roughly $40 million, which has jumped in value since then.
Nine months after that separation, McDonald's filed a lawsuit to claw back those millions of dollars. The brand accused Easterbrook of hiding sexual relationships with three employees and approving a stock grant worth "hundreds of thousands of dollars" to one of the workers he was in a relationship with. An investigation uncovered evidence, including nude and sexually explicit photos and videos of women Easterbrook sent as attachments to his McDonald's email and personal account.
The burger chain alleged Easterbrook deleted these photos from his phone prior to November 2019, and stated that if the executive were truthful about the scope of his relationships and didn't conceal evidence, it would have known it had legal cause to fire him.
The settlement stipulates that Easterbrook return equity and cash from his severance package and also apologize for his actions.
“During my tenure as CEO, I failed at times to uphold McDonald’s values and fulfill certain of my responsibilities as a leader of the company,” Easterbrook said in a statement. “I apologize to my former co-workers, the Board, and the company’s franchisees and suppliers for doing so.”
In the two years since Easterbrook's firing, McDonald's CEO Chris Kempczsinski has embarked on a companywide culture shift. Soon after Easterbrook left, human resources leader David Fairhurst was terminated for misconduct with coworkers outside the office.
Heidi Capozzi was hired as global chief people officer in the spring of 2020 and looked into hiring practices, performance evaluations, and how each department handles employee concerns. Tiffanie Boyd was named U.S. chief people officer in November 2020 following the departure of Melanie Steinbach, who held the post for only three months. At the time, Capozzi said Steinbach's removal "was in the best interest of the company."
“This settlement holds Steve Easterbrook accountable for his clear misconduct, including the way in which he exploited his position as CEO,” McDonald’s Chairman Enrique Hernandez Jr. said in a statement. “The resolution avoids a protracted court process and allows us to move forward. It also affirms the Board’s initial judgment to pursue this case.”