McDonald’s sues ousted CEO, alleging employee relationships

McDonald’s says it's suing Stephen Easterbrook, the CEO it ousted last year over an inappropriate relationship with an employee, alleging today that he covered up relationships with other employees and destroyed evidence. PHOTO CREDIT: Gerry Broome

McDonald’s says it’s suing Stephen Easterbrook, the CEO it ousted last year over an inappropriate relationship with an employee, alleging today that he covered up relationships with other employees and destroyed evidence.

McDonald’s fired Easterbrook last November after he acknowledged exchanging videos and text messages with an employee. Easterbrook told the company that there were no other similar instances.

Based on what the company knew at the time, McDonald’s board approved a separation agreement “without cause” that allowed Easterbrook to keep around $40 million in stock-based benefits plus 26 weeks of pay, amounting to compensation of about $670,000.

McDonald’s says in a lawsuit that it has since become aware of sexual relationships between Easterbrook and three other employees prior to his termination. The company said today that Easterbrook removed evidence of those relationships from his cell phone, preventing investigators from learning about them prior to his firing.

In a lawsuit filed in Delaware, McDonald’s said it would not have terminated Easterbrook without cause if it had known of the additional relationships.

McDonald’s is now attempting to block Easterbrook from exercising his stock options and said it will seek compensatory damages.