McDonald’s sued its former CEO Steve Easterbrook on Monday, accusing him of lying about sexual relationships he had with three subordinates before he was fired over a separate romance last year.
The fast-food giant discovered “dozens of nude, partially nude, or sexually explicit” photos and videos in Easterbrook’s corporate email account, proving he had the trio of trysts in the year before his November 2019 ouster, according to the Delaware state court complaint seeking to claw back his exit compensation package.
When McDonald’s investigated Easterbrook’s brief relationship with a fourth employee that led to his firing, he denied ever being sexually involved with any other company staffers. But an anonymous tip the company received last month led to the evidence showing that was a lie, McDonald’s alleges in the lawsuit.
Easterbrook also approved an “extraordinary” stock grant worth hundreds of thousands of dollars for one of the women while they were involved, McDonald’s alleged.
“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,” Chris Kempczinski, the chain’s current chief executive, said in a statement.
McDonald’s found the racy photos and videos attached to emails Easterbrook sent from his corporate account to his personal address — messages that he deleted from his company cellphone in a failed attempt to cover up the affairs, the lawsuit says.
Had it known about the additional relationships — which violated company policy — McDonald’s board of directors would not have given Easterbrook a separation agreement that handed him a hefty pile of cash and stock awards on his way out, according to the complaint.
Easterbook got the golden parachute because McDonald’s didn’t have enough information to fire him “for cause,” which would have required the company to show that his actions amounted to “dishonesty, fraud, illegality or moral turpitude,” according to the suit.
But the three other relationships, the stock grant and Easterbrook’s lies to company investigators are serious enough to meet that high bar, says the lawsuit, which asks a judge to either award the company damages or cancel Easterbrook’s separation agreement. McDonald’s said it has also taken action to stop Easterbook from exercising stock options or selling company shares.
“Easterbrook’s silence and lies — a clear breach of the duty of candor — were calculated to induce the company to separate him on terms much more favorable to him than those the company would have offered and agreed to had it known the full truth of his behavior,” the complaint says.
Calls to two phone numbers listed under Easterbrook’s name went unanswered Monday. McDonald’s shares slid as much as 1 percent to $202.54 on news of the lawsuit Monday.