McDonald’s has launched legal proceedings in the US against the company’s former CEO, Steve Easterbrook, after it emerged that he allegedly had three consensual sexual relationships with employees that he hid, in the year prior to his departure in November 2019. But does a relationship in with a colleague amount to misconduct? And what outcome can McDonald’s hope for in bringing the claim? Head of Employment Joe Lappin speaks to Sky News about the case.

 

The Background

Steve Easterbrook left McDonald’s in November 2019 after admitting to a consensual relationship with a single member of staff which was in breach of the company’s written policy prohibiting relationships between colleagues. As part of his termination package, Easterbrook received $37m in stock awards, and around $675,000 in severance pay.

Easterbrook told investigators that he did not have a relationship with any other member of staff. McDonalds now say, relying on new evidence, that this was a lie and that had they known about the misconduct at the time they would sacked him for cause with no termination package.

McDonalds also allege that Easterbrook granted an award worth more than $100k to one of the women and that he destroyed evidence of his misconduct, including photographs and emails.

Chris Kempczinski, current CEO of McDonald’s has said that the company ‘does not tolerate behaviour from any employee that does not reflect our values’. These values include being ‘ethical, truthful and dependable’ and were brought in by the company’s founder.

Joe Lappin commented, “Relationships between employees, even by senior staff members, will not necessarily amount to misconduct. But with McDonald’s policies clear in this area, Easterbrook is clearly in breach of company rules and he failed to live up to McDonald’s values.

 

The investigation

Easterbrook lied to investigators and destroyed evidence of his own misconduct. He put his own interests above those of McDonalds. “McDonald’s has done lots in recent years to improve its corporate image. McDonalds is an iconic brand and one of world’s largest restaurant chains. It markets itself to families and one of its core values is integrity.”

In seeking to recover the sums paid to Easterbrook there are undoubtedly legal and commercial factors at play. There is an awful lot of money at stake. Potentially tens of millions of dollars. But this is also a moral judgment. Had McDonalds ignored the new allegations and they had become public, the company would no doubt have faced some very difficult questions.  In the era of MeToo and Black Lives Matter, corporate social responsibility and setting an example are incredibly important and all companies should have these values at the heart of their business models.

 

Company policy

McDonalds have sent a clear message to the market that they take allegations of this nature seriously. Employees regardless of their level of seniority must adhere to company rules. All staff should act in the company’s best interests and honestly.

Joe commented that McDonald’s and Easterbrook may seek to reach a settlement in this matter to avoid these issues being played out in court.

 

To view the full clip of Joe on Sky News, please see below:

Joseph Lappin on Sky News

 


 

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