Mcdonald’s sues former boss for $40m
Briton who turned round burger giant’s fortunes allegedly lied about sexual liaisons with employees
Mcdonald’s is suing Steve Easterbrook, its former British chief executive, for £35 million ($40 million) in severance pay, with the burger giant dramatically blowing open the circumstances of his dismissal last year. Mcdonald’s alleges Mr Easterbrook had relationships with three colleagues and accused him of lying about them.
WHEN Steve Easterbrook, the British corporate star who turned around Mcdonald’s, was fired last year, the American food giant said it was because he had displayed “poor judgment” having had a consensual relationship with a junior employee.
Mr Easterbrook admitted making a “mistake” but amid the high-profile Metoo saga, some felt losing his highpowered job might have been harsh.
Now Mcdonald’s has gone public with accusations that its former chief executive had three additional sexual relationships in the space of a year and accused him of lying to company investigators about the relationships and deleting evidence so he could leave with £35million in severance pay. The purported evidence, recovered by investigators, included dozens of sexually explicit photographs and videos of the women involved, which Mr Easterbrook was alleged to have sent from his work email account to his personal one.
He was also alleged to have approved a grant of shares worth thousands of dollars to a female employee while they were in a sexual relationship.
Mcdonald’s is now suing its former boss for breach of fiduciary duty and fraud and is demanding its $40million back. A 20-page document filed in a Delaware court accused him of violating the fast food company’s “wholesome and family-oriented” image.
It is a stunning turn of events for Watford-born Mr Easterbrook, 53. He attended Watford Grammar School and Durham University, and joined Mcdonald’s in 1992, working his way up.
In 2015, he became chief executive when the company’s share of the fastfood market was in decline. He introduced touchscreen ordering and all-day breakfasts. Mcdonald’s share price doubled with him at the helm.
About the time he moved to the US in 2015 Mr Easterbrook and his wife Susie, a part-time estate agent with whom he has three daughters, divorced.
In suing him, Mcdonald’s said it learnt last October of an allegation that he had engaged in an “inappropriate personal relationship” with a woman referred to as “Employee 1”. At the time the woman confirmed it, saying it was “entirely consensual” and consisted of text messages and video calls over a few weeks, but “never included a physical relationship”.
Mr Easterbrook was interviewed and gave a similar account, and his mobile phone was searched. The company claimed he was asked if he had a sexual relationship with any employee, and he denied doing so. On Nov 1, the board fired him but agreed the separation package. His annual earnings had been more than $15million (£12million).
According to court documents, the company received a tip-off last month alleging a staff member, “Employee 2”, had a sexual relationship with him.
It was alleged an investigation then found “photographic evidence that he had a sexual relationship not only with Employee 2, but with two other employees in the year before he left”.
“That evidence consisted of dozens of nude, partially nude, or sexually explicit photographs and videos of various women, including photographs of these company employees,” the complaint added. Mcdonald’s said that it was “undisputable evidence” that he had repeatedly violated a company ban on any intimate relationship between “employees in a direct or indirect reporting relationship”.
Date stamps on photographs of “Employee 2” also showed he had approved shares worth hundreds of thousands of dollars for her “shortly after their first sexual encounter and within days of their second”, it was alleged.
According to Mcdonald’s the three alleged relationships were not discovered in the initial investigation because only emails on his phone were searched. The complaint claimed this was because he had deleted some emails from his phone. “However, they still showed up on his company email account stored on Mcdonald’s servers.”
Mcdonald’s claimed Mr Easterbrook had been “knowingly untruthful”, that he had “concealed evidence and lied about his wrongdoing” and “destroyed information”. It said it would not have agreed separation terms had it known.
There was no immediate comment from Mr Easterbrook.