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McDonald’s takes legal action against former CEO after investigation into staff relationships

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McDonald’s has begun fresh legal action against its former British-born chief executive Steve Easterbrook, accusing him of lying about sexual relationships with staff.

Mr Easterbrook was relieved of his duties in November after he engaged in a consensual relationship with an employee.

At the time, the fast food chain said he had “demonstrated poor judgement” and fired him for violating company policy forbidding such relationships.

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It then negotiated a separation agreement with Easterbrook under which he would be terminated “without cause,” which entitled him to receive “substantial” severance benefits.

But in a bombshell filing to the Court of Chancery of the state of Delaware yesterday, McDonald’s revealed it had carried out a second investigation after receiving an anonymous report in July that an employee had engaged in a sexual relationship with Mr Easterbrook when he was CEO.

During this investigation it claims to have discovered photographic evidence that, while he was CEO, Mr Easterbrook had engaged in a physical sexual relationship with a further two company employees in the year before his termination.

It said that evidence 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 email account to his personal email 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, it alleged.

The court filing said the photographs are “undisputable evidence” that Mr Easterbrook lied about violating the company’s prohibition of any kind of intimate relationship between employees in a direct or indirect reporting relationship.

McDonald’s also said the date and time stamps of the photographs involving one employee “conclusively” show that he approved a special discretionary grant of 13 restricted stock units – worth hundreds of thousands of dollars – to her shortly after their first sexual encounter and within days of their second.

“Neither these photographs, nor the emails to which they were attached, were present on Mr Easterbrook’s company-issued phone when it was searched by independent outside counsel in late October 2019 because Easterbrook, with the intention of concealing their existence from the company, had deleted them from his phone,” McDonald’s states in the court filing.

“Unbeknownst to Easterbrook, however, the deletion of the emails from the mail application on his company-issued phone did not also trigger the deletion of those emails from his company email account stored on the company’s servers.”

McDonald’s argues that it would not have agreed to the terms of the separation agreement had it then been aware of Mr Easterbrook’s physical sexual relationships with three employees, his approval of a discretionary stock grant for one of those employees while they were in a sexual relationship, and the falsity of his representation to outside counsel that he had never engaged in a physical sexual relationship.

Mr Easterbrook served as CEO of McDonald’s for five years after previously leading its UK and Northern European business. He earned a salary of almost $16m last year and had been overseeing the biggest franchise growth project in its history.

He has not made any comment on the latest allegations.

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Andrew Seymour

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