McDonald’s Corp. is suing Steve Easterbrook, the CEO it ousted last year over an inappropriate relationship with an employee, alleging Monday that he covered up relationships with other employees, approved stock grants and destroyed evidence.
The Chicago-based burger giant filed suit in the Court of Chancery of the State of Delaware to recover compensation and severance benefits that would not have been retained by Easterbrook had he been terminated for cause.
McDonald’s said that in July it received an anonymous report alleging that a McDonald’s employee, named as Employee-2, engaged in a sexual relationship with Easterbrook while he was CEO, and two other relationships.
“An internal investigation into this allegation discovered photographic evidence that, while he was CEO, Easterbrook had engaged in a physical sexual relationship not only with Employee-2, but also with two other company employees in the year before his termination,” the complaint in alleges.
The lawsuit also alleges Easterbrook, left, “approved an extraordinary stock grant, worth hundreds of thousands of dollars, for one of those employees in the midst of their sexual relationship.”
The company ousted Easterbrook in November 2019, saying he violated company policy and demonstrated “poor judgment involving a recent consensual relationship with an employee.”
“Had the board known on Nov. 1, 2019 what it learned in July 2020 regarding Easterbrook’s conduct as CEO, it would not have approved the separation agreement and would have instead terminated Easterbrook for cause,” the company said in a Securities and Exchange Commission filing on Monday.
“And had Easterbrook not deleted evidence from his phone and lied to the board and its investigators in October 2019, the board would have known the full record of his conduct when it considered the terms of his separation,” the SEC filing said.
McDonald’s said its internal investigation discovered photographic evidence that “consisted of dozens of nude, partially nude or sexually explicit photographs and videos of various women, including photographs of these company employees, that Easterbrook had sent as attachments to messages from his company e-mail account to his personal e-mail account. The date and time stamps on the photographs of the three company employees show that the photographs were all taken in late 2018 or early 2019.”
McDonald’s said it “has taken immediate action to prevent Mr. Easterbrook from exercising any stock options or selling any stock issuable in respect of outstanding equity awards. The company’s complaint alleges that Mr. Easterbrook breached his fiduciary duties as an officer and director of the company and committed fraud. …”
McDonald's has more than 38,000 locations in over 100 countries.
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