McDonald’s Sues Former CEO, Says He Granted An Employee ‘Hundreds of Thousands of Dollars’ in Stocks After Sexual Encounter  

US fast-food giant McDonald's announced today (Aug 10) that it is suing former CEO Steve Easterbrook to clawback his severance pay for lying about about physical sexual relationships he had with several McDonald’s employees.

McDonald had sacked Easterbrook in Nov 2019 after it emerged that he engaged in a relationship with a colleague.

The fast food giant had then maintained that the relationship was consensual, but Easterbrook had “violated company policy and demonstrated poor judgment involving a recent consensual relationship with an employee”. The company's rules for managers explicitly prohibits them from become romantically involved with a subordinate. In an parting email to the company employees, Easterbrook acknowledged the relationship and said it was a mistake.

In a securities filing and a lawsuit today (Aug 10), McDonald's said it had subsequently learned that Easertbrook lied "and destroyed information regarding inappropriate personal behaviour" and relationships with three other employees, as well as providing stock worth hundreds of thousands of dollars to one of the employees “in the midst of their sexual relationship”.

The company said that it has recently identified evidence showing that Easterbrook had physical sexual relationships with three McDonald’s employees in the year before his termination; that he approved an extraordinary stock grant, worth hundreds of thousands of dollars, for one of those employees in the midst of their sexual relationship; and that he was knowingly untruthful with McDonald’s investigators in 2019.

Easterbrook was appointed as the chief executive of McDonald's in 2015. He is widely credited with revitalising the firm's menus and restaurants, by re-modelling stores and using better ingredients. During his tenure, the company began serving breakfast throughout the day and also entered in to a food delivery partnership with UberEats.

Under Easterbrook’s stewardship, the company launched several innovation including installing electronic screens in its restaurants that allowed customers to order and customise their meals. Mobile payment options were also introduced to emphasise on customer convenience. During his tenure, the company’s shares nearly doubled in value.

Easterbrook, who is from U.K, had a long career at McDonald’s. Before becoming CEO, he previously worked as head of the company’s U.K. business. He quit in 2011 to become boss of Pizza Express and then Asian food chain Wagamama. He returned to McDonald's in 2013 and was subsequently elevated as the CEO.

Easterbrook’s severance package was said to be worth $40 million. The package came under intense scrutiny as the company has often faced criticism for lobbying against federal minimum wage increases and wages it pays for its restaurant workers.