McDonald’s sues former CEO over alleged sexual relationships with employees

McDonald’s has sued its former chief executive Steve Easterbook amid allegations that he fraudulently hid details of three “physical sexual relationships” with employees when he was fired last November, the Financial Times reports.

Last year, Easterbrook was forced to leave the company over a separate relationship with an employee, which violated company policy, but the board has now alleged that he misled investigators about engaging in sexual relationships with three employees in the year before his dismissal.

In July, the company received an anonymous report that Easterbook had a sexual relationship beyond that which the board had already been informed about, prompting a second investigation and the subsequent lawsuit.

In a securities filing and a document lodged with the Delaware court of chancery, McDonald’s has said it is seeking to recover the compensation and severance payments it allowed Easterbook to leave with, which was reported at the time to be a deal worth approximately $40m.

Had the company known of the extent of his “inappropriate personal behaviour,” it has said, it would not have approved the agreement, and would have instead terminated him for cause.

The lawsuit also accuses Easterbook of approving a stock grant worth hundreds of thousands of dollars for one of the employees he was sexually involved with, and that he was “knowingly untruthful” with investigators at the time of the original inquiry.

In light of this, the company has also taken steps to prevent Easterbook from selling stock it had granted to him or exercising his remaining share options.

“Based on the results of the investigation, the board concluded that Mr Easterbrook lied to the company and the board and destroyed information regarding inappropriate personal behaviour and in fact had been involved in sexual relationships with three additional company employees prior to his termination, all in violation of company policy,” McDonald’s said.

“McDonald’s does not tolerate behaviour from any employee that does not reflect our values,” added current CEO Chris Kempczinski in a separate message seen by the Financial Times.

“We now know that his conduct deviated from our values in different and far more extensive ways than we were aware when he left the company last year.”