McDonald's has sued former CEO Steve Easterbrook, claiming he "concealed evidence and lied" about his alleged sexual relationships with three employees before it fired him for "engaging in an inappropriate relationship" with another staffer, according to the fast-feeder's August 10 Securities and Exchange Commission filing.
In November, the company said Easterbrook was eligible for six months of severance pay, which would have been $675,000, based on his 2018 base salary of $1.35 million.
The fast-food chain alleges in the lawsuit that ex-CEO Steve Easterbrook engaged in sexual relationships with three employees and then attempted to cover up the relationships.
McDonald's alleged that Easterbrook destroyed evidence of those relationships and sexually explicit photos and videos sent from corporate email accounts inside his cell phone.
"Knowing that the company was investigating his conduct and evaluating how best to respond to it, knowing that the company was considering whether to terminate him with cause or without, and knowing that revelation of his sexual relationship with Employee-2, coincident approval of her discretionary stock grant, and his relationships with other company employees would ensure his termination for cause, Easterbrook told deliberate falsehoods".
Unacceptable Behavior: Easterbrook was believed to have engaged in a non-physical but sexual relationship with an employee through texting and video calls.
The company said it would not have fired Easterbrook without case had it known of the other relationships, reported AP. The company has also taken steps to prevent Mr Easterbrook from exercising any stock options or selling any shares.
Easterbrook could not immediately be reached for comment.
He added, "McDonald's does not tolerate behavior from any employee that does not reflect our values".
Easterbrook became CEO and president of McDonald's United Kingdom in 2006, having joined McDonald's from PricewaterhouseCoopers in 1993 as an accountant. At the time, investigators were unable to find evidence of any sexual relationships between Easterbrook and McDonald's employees.
McDonald's executive severance policy for executives states that an employee's termination will be defined as "for cause" when there is a "material violation of McDonald's standards of business conduct or other employment policies".
When the company cut ties with Easterbrook, it issued a statement to the effect that he had violated company policy and "demonstrated poor judgement" by engaging in a consensual relationship with an employee. Mr Easterbrook was awarded more than $US29m in stock-based compensation in those two years. Total compensation, including equity awards, amounted to $17.4 million in 2019.
That payout included $700,000 in cash severance to Mr. Easterbrook. Kempczinski's announcement was sent out to employees on Monday.
It's unclear how much Easterbrook might have to pay. Mr Easterbrook, who is British, began his career with McDonald's in 1993 when he served as a finance manager in London. Once those assessments are completed, they will be shared with employees in November, according to McDonald's Chief People Officer Heidi Capozzi.
But Hubbard applauded McDonald's for reopening the investigation when new information came forward.