Fast-food giant McDonald's has filed a lawsuit against its former chief executive officer, Steve Easterbrook, just eight months after he was ousted. In its suit, McDonald's has accused Easterbrook of concealing evidence, lying and financial fraud.
Easterbrook exited the company following the revelation of a sexting scandal involving one of his subordinates. The executive eventually apologized for his misbehavior and walked away from the company with a hefty compensation worth tens of millions of dollars. The company then hired 51-year old business veteran Chris Kempczinki to take over Easterbrook's position.
Talk about the issue eventually died down in the following months. However, new accusations of Easterbrook's inappropriate behaviors toward his subordinates emerged once again last month. A former employee stepped forward and alleged that she was in a sexual relationship with Easterbrook while he was still the CEO of the company.
In its lawsuit, which was filed in Delaware on Monday, McDonald's claimed that Easterbrook had inappropriate relations with at least three of its employees during his tenure. The company also alleged that Easterbrook had given at least one of those employees an unspecified amount of McDonald's shares.
Through the suit, McDonald's hopes to recoup the stock options that were illegally issued by Easterbrook along with the compensations that were given to him after his exit – estimated to be worth more than $40 million.
Easterbrook had worked for McDonald's for nearly two decades before he took the CEO position in March 2015. Prior to his ousting, Easterbrook was considered to be the company's savior after he took it out of a financial slump. During his tenure, the company's stocks have nearly doubled in value.
In October 2019, McDonald's board of directors was made aware of reports of Easterbrook's misconduct. Despite his denial of the allegations, the company's board eventually decided to fire him.
In an internal memo, Kempczink reminded employees that McDonald's will not tolerate inappropriate behavior that goes against the company's values. He wrote that the management is committed to ensuring the continued practice of its values to ensure that McDonald's will be a positive force for change.
The filing of the lawsuit came as a surprise for most given how most American companies would have chosen to move on from the issue as opposed to besmirching its reputation after the fact. Since the rise of civil rights movements such as MeToo and Black Lives Matter, several high-profile executives have lost their jobs following accusations of abuse, sexual harassment and other misconduct.
