McDonald’s: We Didn’t Go Through Fired CEO’s Emails Before Giving Him a Golden Parachute. Oops

Last year, McDonald’s fired their CEO and President, Steve Easterbrook for consensual sex with an employee. He got a nice golden parachute, estimated at $40 million.

But, now, another employee has come forth to accuse Easterbrook of another sexual relationship with an employee. Now, the count is up to three employees and one of those employees received stock as a result.

McDonald’s is suing Easterbrook for the return of his parachute, “accusing him of lying, concealing evidence and fraud.” But, the lawsuit also admits that McDonald’s didn’t look at Easterbrook’s emails as part of their investigation. Oopsie!

I can see how this happened. Easterbrook knew that if they investigated too much more than just the initial affair would come out. He agreed to leave rapidly, apologized publicly, and took his money and went home. He probably assumed that that would end the investigation and once the agreements were all signed, he’d be in the clear. Whew!

And there was a good chance that would happen. Signed severance packages are signed and done–generally. But, McDonald’s should never have ended their investigation immediately after a confession.

You always check emails. You always do a thorough investigation. Any HR person with five minutes of experience will tell you that it’s unlikely that sexual misconduct cases are rarely limited to one employee. Even in this case, where Easterbrook’s unnamed affair partner, never alleged any sort of coercion or harassment, they should have investigated. When you’re offering a severance package, which comes with legal releases and the like, you want a thorough investigation.

I have no idea how this lawsuit will pan out, but I do know that investigate, investigate, investigate is the first step. Always conduct an investigation when there are allegations. Never assume that the number of victims was one.

And yes, I understand that the original affair was, by all reports, consensual. But, no CEO can have a sexual relationship with an employee without there being a power imbalance. Something that the McDonald’s Board agreed with when Easterbrook left. Make sure your policies prohibit relationships between people in reporting lines.

And always, always, read the emails.

Photo by Lisa Fotios

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6 thoughts on “McDonald’s: We Didn’t Go Through Fired CEO’s Emails Before Giving Him a Golden Parachute. Oops

  1. I realize this is a civil issue and not a criminal issue, but in general in the US, we’ve accepted that we have a right to not self incriminate. If I were being investigated internally, you bet I’d delete the nudie pics off my phone too. The other thing is, there is an electronic paper trail of all of this anyway (linked NYT article says so in so many words), so what was the point of relying on his statements in the first place? And given that there is an electronic trail of all of this on a server, is it really concealing or destroying evidence to delete something from your phone?

    This is where I have to admit I ain’t no lawyer, but I have a hard time finding in favor of McDonald’s on this one. Signing the release goes both ways, and one of the reasons people sign it is because of a sense of finality and moving on with life. Generally speaking, “bad business decisions” are not recoverable in court. And I see this as a bad business decision, not provable fraud. McDonald’s performed a poor, rushed investigation, and I don’t think the CEO’s potentially false representations outweigh this, especially with $45M on the line.

  2. Sympathy for McDonald’s is very low on my list as they can afford to pay the damages. Because someone failed to do their do-process in getting this person out of the corporation is something they will have to swallow and also hopefully not make the mistake in their hiring vetting process again. That old-boy philosophy of hiding it under the rug has disappeared.

    1. Wouldn’t having been involved with Easterbrook — a CEO having sexual relations with his subordinates — be punishment enough?

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