McDonald’s expands its inquiry
Company aims to learn if ex-CEO hid department misdeeds
An internal investigation by McDonald’s of potential misconduct has extended beyond its former chief executive officer, who was forced out late last year.
The company’s board of directors has hired an outside law firm as part of an investigation into its human resources department to determine whether Steve Easterbrook, who exited abruptly in November, covered up misconduct for others in that department.
“The board will follow the facts wherever they may lead,” a company spokesman said in a statement about the investigation.
The company didn’t provide details about the allegations. On Wednesday, however, The Wall Street Journal reported that McDonald’s conducted an internal investigation in 2018 after employees complained about inappropriate physical contact between the company’s top human resources executive, David Fairhurst, and a subordinate at a holiday party.
After Easterbrook became the CEO of McDonald’s in 2015, he named Fairhurst, a friend, to lead the human resources department.
Fairhurst departed around the same time as Easterbrook, but the Chicago-based company said his departure was unrelated. It now says he was fired.
Employees in human resources also told the McDonald’s legal department that they felt passed over for advancement opportunities because they weren’t part of an after-hours social circle among the leaders of that department, the Journal reported.
Easterbrook was given a severance package worth more than $37 million in stock awards when he was asked to leave. At the time, the company said its investigation revealed that he had had a consensual, text- and video-based relationship with an employee, but that it didn’t rise to a firing with cause. Easterbrook issued an apology to McDonald’s em
ployees.
McDonald’s sued Easterbrook last month to claw back the severance after another investigation, sparked by a tip that board Chairman Rick Hernandez got in July, found Easterbrook had had physical relationships with three other employees during the year before his firing. One woman was granted hundreds of thousands of dollars in stock options during the time they were involved.
In its complaint, McDonald’s said Easterbrook lied and deleted evidence of those relationships from his company-issued phone, which McDonald’s later found on company servers.
The company said Easterbrook would have had to forfeit that money if he had been truthful about the extent of his relationships.
Easterbrook filed a response to the lawsuit last week, saying the company had the information about those other relationships when the parties agreed to the severance deal. He is asking the court to dismiss the suit. Easterbrook’s lawyer did not immediately respond to a request for comment.
The saga marked a fall from grace for Easterbrook, who helped turn the company around after taking over in 2015. The British businessman spearheaded a menu overhaul, restaurant renovations and technological investments that helped increase sales and profits at the world’s largest burger chain. He also moved the company’s headquarters from suburban Oak Brook, Ill., to Chicago’s Fulton Market District.
McDonald’s named Heidi Capozzi, who had worked for Boeing, as human resources chief in March. Capozzi is conducting a review of the department, including how performance is evaluated and how employee concerns are raised and investigated.