By now, we’ve all gotten used to hearing stories of high-level executives of huge corporations getting fired for misconduct, and while some people might be glad to see some signs of accountability, it’s usually bittersweet when it gets announced that they received a severance package worth tens of millions of dollars. But now McDonald’s is suing their former CEO, Steve Easterbrook, to return the $37 million he was paid as part of his severance package, claiming his misconduct was more extensive than they realized at the time they negotiated his severance package.
Easterbrook was removed as CEO back in November of 2019 for having a personal relationship with a female colleague. The relationship was apparently consensual and consisted of nothing more than text messages and video calls, but it violated company policy, and as a result, Easterbrook was fired from his position as CEO without cause.
Only after Easterbrook had been fired, and had negotiated his severance package with the company, did the company receive information from an anonymous source claiming Easterbrook had had sexual relations with at least three other women at the company. In one instance, Easterbrook allegedly approved a discretionary stock grant worth hundreds of thousands of dollars to be granted to one of the women while they were involved.
The allegation prompted the company to launch another investigation into Easterbrook’s conduct while he was CEO. They had already hired outside counsel to interview Easterbrook and the woman with whom they knew at that time he was romantically involved. They had also already reviewed his company-issued cell phone for any evidence of misconduct, but the second investigation found dozens of photos and videos of other women either nude, partially nude, and/or in sexually explicit positions.
The investigation revealed that Easterbrook had sent these photos and videos from his work email to his personal email, then deleted them from his phone. What he failed to realize was that the act of deleting the emails from the mail app on his phone did not delete them from his McDonald’s email account on the corporation’s servers.
McDonald’s filed its lawsuit against Easterbrook in Delaware Chancery Court, claiming they would not have given Easterbrook a severance package worth $37 million in cash, bonuses, and stock if they had known the extent of his alleged misconduct. Easterbrook filed a motion to have the lawsuit dismissed, saying the lawsuit should be filed in Illinois court, since McDonald’s is headquartered in Chicago. He also claimed the company knew about all his sexual and romantic relationships at the time they negotiated his severance package with him.
Vice Chancellor Joseph Slights denied the motion to dismiss, writing that Easterbrook’s act of deleting evidence from the mail app on his phone suggests he knew he had engaged in misconduct and was attempting to cover it up.
McDonald’s applauded Slights’s ruling, saying they were looking forward to moving forward with the case and holding Easterbrook accountable for violating the corporation’s policies, values, and abusing the trust of his coworkers, as well as the company’s franchisees, shareholders, and board members.
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